Selling Homes to Investors on Terms

[Patrick Sears]

Hello,

I was wondering what y'all thought about paying all cash for low-end fixers, NOT fixing them up, and then offering to sell them on terms to local investors looking to fix and flip or fix and rent?  Trying to get away from the rental/landlord thing...

Some thoughts:

• Example: Buy a house for 20k-40k; sell to investor for $5000 down, 12% int, 240 month amort with 3-5 year balloon?  These types of homes around here will rent for $800-$1100 all day long depending upon # of bedrooms
• Season for 6-12 months then sell either the whole note or a front-end partial to a note buyer
  • What would the discounts be for either scenario? Recourse vs. Non-recourse?  Would there be a strong market for these notes?
  • If I sold a front-end partial, would the note buyer get put on the title as a 1st position lien holder?
  • Would it make things easier if I tried to structure this as a land contract/contract for deed to my investor/buyer?
• Sell to investors with LLC's only to avoid Dodd-Frank issues
  • Or get my mortgage origination licensing and sell to everyone? 
  • Can I make decent money originating loans for other investors?

I've read a couple of ebooks on the subject; they are ok but not exactly college-level reading, at least not from a finance perspective.

Would it be realistic to turn this into a full-time business and build a 100+ note portfolio of these things?

Thanks!