All Forum Posts by: Cheryl Foster

@Cheryl Foster. I forgot to mention that I would amortize the loan over 30 years, with the loan being due paid in full in 7 or 10 years (so loan payment of $1,000+). That allows awhile for the person to make improvements, keep the business going, and save up the down payment, to be able to refinance it (with a bank, partner, other funding) after the time is up. Of course, st the end of that 7 or 10 years, I, the seller, could always offer to renegotiate/extend the contract.

@Andre Taylor Other folks in here may have a different explanation, but I can at least provide an example of seller financing that I offer.

For example, I have a Storage Unit Facility/commercial retail store/residential rental property for sale in TN and I am offering seller financing. I put seller financing on my website as one financing option (I put links to local banks/loan officers with whom I have spoken, in case a prospective buyer wants to investigate bank financing). Then I worked with our Chattanooga attorney, who wrote up a terms sheet, as well as a financial application and financial contract. A prospective buyer would sign a Non-Disclosure Agreement (protecting us both), and complete the financial application (includes references, credit check). I (seller) will then evaluate the application to see what purchasing terms I can offer. For example, if the buyer has a low-ish credit score and/or little previous business experience, then the person is a higher financial risk to us (has an increased likelihood of defaulting on the loan). To mitigate this risk, we may offer that person a loan with a higher interest rate and/or require a larger down payment, than someone who is a lower risk. Ultimately, as s seller, I want the property to make money for the person, so s/he can, in turn, take care of the property and pour into their business. Keeping a low down payment and reasonable interest rate helps me, because the buyer keeps more money that s/he can use to succeed on that property. This will increase the likelihood that my property will be cared for, and thus, I will continue to get paid the mortgage payments.

The buyer makes an offer (say $240k), defining what they can put as a down payment, and the terms s/he proposes. Then, for financing, I am likely to offer, say $15,000-$30,000 down on a $240k mortgage, with 5-7% interest, depending on the risk factors I mentioned. The prospective buyer will do their due diligence, and have their own lawyer (or use mine) review my lawyer's financial agreement (a mortgage loan, with me, the seller, as holding the mortgage). It will be titled in the buyer's name, and I will "be the bank," the mortgage/lien holder. It will all be registered as such with the county. The financial agreement (mortgage) defines that I reserve the right to inspect the property periodically if desired, to make sure the terms of the contract are upheld (no illegal operations on the premises, buildings and facilities well-maintained, approval is requested before renovations, etc.). 

@Matt Arden Who pays for water? Remember to set aside funds for infrastructure maintenance: driveway, interior road/path, rainwater drainage repairs/maintenance, septic system repairs, etc.

@Christopher Randall - I came across your year-old post about you prepping to do a house hack in/around Chattanooga, and I wondered how it is going for you!! Did you find anything? We have a property to sell that could be good for someone as a house-hack, as it has cash flowing properties on the premises. It is too far from Chattanooga to work for you (90 miles east, in the Copperhill, TN tourism area), but my point is there are Mom and Pop owners out there who are aging out of their properties and need to sell. I hope you can find one like that. A good option may be to go to a property manager's office and discuss with the manager. Describe that you are looking for a duplex, triplex or 4-plex that you can buy, and wonder if they have any investors that are looking to get out of the business or that may be interested in selling one property (especially due to age, but also due to change of interest/strategy). Remember you can get a FHA renovation loan on a single-family owner-occupied home, as well as on a 1-4 plex (when you intend to live in one of the units), and wrap the renovation cost into the whole loan (you can only pay to renovate the unit in which you will live, but sometimes that can include a shared furnace or water heater or electrical infrastructure, or roof, that qualifies as "your unit" but benefits the whole property). You would still only pay 3.5% or so down payment (of the whole deal, of the after-repair value, based on the estimated post-remodeled appraisal). A great mortgage broker would be able to help you figure that out. We have one out of GA, but I am not sure if he can do TN. Hope this helped. Contact me if you have any questions at all!

I definitely see the value in upgrading an individual (personal) account to a PRO account. Logistically, do business owners sign up as individual PRO accounts? Or does each business they own sign up? What about joint member LLCs - does each member need his/her own PRO account? Also, are their any current promotional codes to upgrade to PRO?  Please explain. Thank you!

@Greg Gillespie - Hi Greg, please see the event details above. It is at "Birds Fly South..." restaurant in Greenville. I attended a meet-up with @Jonathan Anderson last year and it was so helpful. Great group of folks. Come if you can! I am in Anderson, SC, too, so feel free to connect with me.

@Cirilo Villar - Really read the recommended books and these articles and forums, and listen to podcasts (easy to listen in the car while driving to work, or while doing laundry). Take notes. Study. Learn all you can. Explore "house hacking" to buy a 2 or 4 plex and live in one unit. Research types of home Renovation loans (still under 4% down, like the FHA you mentioned), to fix up whatever you buy, as an owner-occupant and have repairs rolled into the loan. https://www.nerdwallet.com/blog/mortgages/renovation-loans-expand-homebuying-options/

I suggest you do this research, THEN come back to the forums to ask specific questions. These folks will be glad to help answer you, especially when you show you are studying and learning on your own.

Originally posted by @Billy Linn:

Google tools have been really useful for us. Sheets for keeping track of finances, Docs for creating documents, Drive for storing documents, and Photos for keeping track of photos. They do the job pretty well for being free but I'd really like to have something more unified and that has better organizing capabilities. I almost have a system that's good enough to replace them all. 

 Hi @Billy Lynn - I just wondered what you meant by “I almost have a system that's good enough to replace them all.“ What is your replacement system? Are you working on a mobile app of your own, by chance? If so, can you share details? Thanks!

Yes, @Alex Bekeza - thanks for asking! I really like this question! I am looking forward to reading about RE investors’ top picks of the most useful mobile apps as well as desktop software programs.  By the way,  @Brandon Turner, I would really enjoy seeing a podcast of BiggerPockets’ “RE Tech Top 10” or “RE Tech Top 20” most useful software applications, websites and/or mobile apps!!

@Kevin Douglas - how did the financing work out with the company you mentioned, CresCom? Anyone else finance small deals (especially deals where the SF is unlivable but the acreage alone would be worth the money?