All Forum Posts by: Dean Weltman

I think it really depends on you. How much can you get, what's it going to cost, and how does that compare to your options? I'm using hard money and HELOC money would be a lot cheaper and faster to access. But I don't have enough equity in my home to make it worth pursuing, while I can get a pretty good amount approved from my private lender...

I've been wanting to make it to a meetup for awhile. Looks like this will be the first. Looking forward to it!

I second lonestarlandlaw.com. I've used him for a few things. He's very knowledgeable, and wrote the book on Texas Real Estate Law for laypeople... Literally, it's on Amazon.

I'm interested!

Thanks to all the replies on this. I tried to insert everyone's names, but it doesn't show up highlighted, making me think I'm doing something wrong...

Lots of good info, and David Willis from Texas is actually the attorney I was using. The issue I had was that apparently it's common for a lot of the note contracts to state they May call the note due if it is assumed or an interest in the property is sold without lender approval of the buyer's credit, but mine says they Shall call it due - a big enough difference for me that I don't care to risk it.

Apparently, you can still do a lease option in Texas, but under 180 days, or there are a lot of restrictions and requirements. I'm leaning towards doing this with a healthy down payment, plus a monthly rent that puts about $450/mo in my pocket. I already explained to the buyer that if we proceed with this the rent gives him $0 interest in the property - it is simply rent, and not much more than the going rent in that area. Also, the down is partially a refundable rental deposit, and part of it is a non-refundable option payment.

Looks like I'll still get my money in about six+ months, but I was planning on using the profits for a large (for me) renovation I'm doing in Ft Worth. So much for the best laid plans... Regardless, I'm pretty conservative and this extra money was my safety reserve. Once my renovation is done come December, I'm interested in putting the proceeds into multi-family - so, there will be many more questions at that time. lol

Thanks for all the quick advice. I appreciate the help, and I'm grateful for the many people on this site that are quick to share their knowledge and opinions. 

-Dean R. Weltman

Guys and Gals,

My first wrap hit a problem - HUD apparently doesn't allow wraps of FHA mortgages. I have a buyer ready and willing, but he insists on only doing an owner financed transaction.

Here's the skinny: I have a SFR that I owe about $100k, just put $25k in for renovation (and major plumbing repairs), and agreed to sell it at $145k. Not enough room there for a realtor, so I'm doing a FSBO. But, with FSBO it seems that everyone wants it owner financed.

My buyer is ready to put down $30k to buy it, and I was going to sell it on a wraparound note, adding about 2% to the remaining balance. This was looking very lucrative, but now the problem with wrapping FHA loans. Any ideas out there on how I can still get this done?

Is the FHA restriction only based on administrative discipline? What are the chances of the DOS clause getting called? What else am I missing?

Not to be a pain, and I hear what is being said, but I have a question as this pertains to me. I have a house I bought several years ago on an FHA loan. I later turned it into a rental. Recently, the renters moved out in the middle of the night and I decided to sell it and realize my equity. I owe about $100k and the home is worth about $145k.

I did a FSBO sign out front and immediately was contacted by someone with nearby family. They can afford the payments, and a 20% down payment, but due to bad credit they cannot currently qualify for a loan. Although I consider myself an investor, I'm classified as 'small fries," and I'm not otherwise involved in real estate. I can afford the additional payments if the buyer defaults, and I'm in Texas, which has a fairly straight and simple foreclosure process.

All that being said to differentiate myself from people looking to do numerous wrap transactions as part of their business model. So, as long as it's just me wrapping my FHA note straight to the buyer, and I can afford the monthly payments and probably could afford to pay the entire note if called due, AND evictions/foreclosures are not an issue here... Does this single transaction still seem worrisome to everyone? I imagine that any random mass audits of various mortgage notes will probably focus on their being current and all the paperwork at the lender being in order, not coming to my house to look through my receipt files (shoebox). And yes, I'm being hopeful, but it is extremely convenient for me to do this transaction, and I like the small monthly profit that trickles in for years, as well as the lack of closing costs and realtor fees.

Thoughts?

@Terry Lewis

Thanks for your input, I do appreciate the advice. I already shook on this deal so I'll take my lumps, but it's still a win for me - just sounds like it could have been a bit more lucrative. There's always the next one. 

I have a rental I've owned for several years that recently and unexpectedly became vacant. I had some major under slab plumbing issues that needed to be fixed, plus the roof was overdue to be replaced, so I decided to go all in and renovate the entire house. I then put the house on the market with a FSBO sign out front and started getting several calls a day. Most of those calls asked about owner financing, and I finally told one caller that I would only consider it with 20% down (on a $140,000 price). To my surprise, the guy said yes, and then I immediately had to start figuring out what I was going to do...

The legal part I have figured pretty well, and I'm having a very knowledgeable attorney in Texas draw up the papers. What brings me here is wanting some opinions on what a reasonable price markup would be for doing the owner-financing, what most consider a reasonable down payment, and what's a reasonable interest rate in this situation...

I didn't mark up the property, though in hindsight I wish I had. I did, however, charge a flat $5,000 'closing fee' and I'm debating 6% for the note at 30 years. The underlying note is a 30 year note at 3.75%. I feel like this is reasonable, and is at a bit of a premium for the extra service I am providing. What does everyone think, too much, too little, or like the third bowl of porridge - just right?

 Yes, and it was a front company for their shady business dealings... And I think it was located in NJ. Coincidence? I think not. Lol