All Forum Posts by: Tim Ivory

I’m about to market for tenant buyers as part of a lease option strategy and need to be able to set them up with a good mortgage broker so we can see exactly how long it will take for them to qualify for a mortgage and buy the property they have leased through us with an option to buy. Ideally, I anticipate a third of them to eventually qualify and get a mortgage before their 3 year lease is up, though I have no first hand experience to corroborate this estimate. The payoff will be long term, so I’d need need a special kind of broker in it for the long haul and a forward thinker.

I will be continuously marketing for people who want to buy a house soon but don't qualify for a mortgage at the moment (as far as they know). As such, I need to know exactly when they will be able to qualify for a mortgage. Moreover, and perhaps most importantly, for a good mortgage broker to be willing to work with them to let them know what they need to do in order to qualify for a mortgage as soon as possible. My business plan is simple; I’m collecting a lease option fee from a tenant buyer after assigning to them the contract I have with the seller. I need to know they are on their way to qualifying for a mortgage before I refer them as a prospect to the seller.

I'll be contacting my local group of mortgage brokers soon, so the purpose of this thread is to reach out at the national level to any other mortgage brokers who would be interested in a lot of referrals, whether they are from a national chain or own their own business. Forgive my naivety if this doesn't sound like a good deal, but help me see why. I'd be very happy to find anyone willing to give it a try so I can get this project moving and focus on the hardest part -- talking with FSBO's!

Feel free to reach out anytime if you are a broker, or if you know of one who might be interested.

All the best of good things,

Tim

I’m about to market for tenant buyers as part of a lease option strategy and need to be able to set them up with a good mortgage broker so we can see exactly how long it will take for them to qualify for a mortgage and buy the property they have leased through us with an option to buy. Ideally, I anticipate a third of them to eventually qualify and get a mortgage before their 3 year lease is up, though I have no first hand experience to corroborate this estimate. The payoff will be long term, so I’d need need a special kind of broker in it for the long haul and a forward thinker.

I will be continuously marketing for people who want to buy a house soon but don't qualify for a mortgage at the moment (as far as they know). As such, I need to know exactly when they will be able to qualify for a mortgage. Moreover, and perhaps most importantly, for a good mortgage broker to be willing to work with them to let them know what they need to do in order to qualify for a mortgage as soon as possible. My business plan is simple; I’m collecting a lease option fee from a tenant buyer after assigning to them the contract I have with the seller. I need to know they are on their way to qualifying for a mortgage before I refer them as a prospect to the seller.

I'll be contacting my local group of mortgage brokers soon, so the purpose of this thread is to reach out at the national level to any other mortgage brokers who would be interested in a lot of referrals, whether they are from a national chain or own their own business. Forgive my naivety if this doesn't sound like a good deal, but help me see why. I'd be very happy to find anyone willing to give it a try so I can get this project moving and focus on the hardest part -- talking with FSBO's!

Feel free to reach out anytime if you are a broker, or if you know of one who might be interested.

All the best of good things,

Tim

Hoping to get an answer sometime soon so I don't have to open a thread on it :)

This is an important piece of the puzzle I just discovered as well, kind of a dream deflator, lol. Will likely seek gap financing from private investors and/or wholesale or do some lease options deals to build capital. Just to clarify though, is this true with all HML? They all will only reimburse and none will pay up front?

One other thing, is it possible to have holding costs, selling cost and or any other fixed costs wrapped within the HML itself?

I filed for an LLC today and got a business license for the state of TN, had to file at the city and county level for the business tax registration. The name is Ivory Estate, LLC. It has my last name in the title and I also will be closing as "Ivory Estate, LLC". Do I need to register as a fictitious business name with my county? I want to be sure the contracts I sign will be legally binding, of course.

Thank you!! That clears it up. They are indeed separate structures, especially if a downpayment is usually required for a wrap around mortgage. 

With a wrap, title does in fact change hands in that case, but the seller is secured with a mortgage on the promissary note for both the equity and remaining mortgage (atleast).

• A note that is secured through real estate is a mortgage.
• A note that  is not secured is a note.
• A mortgage that wraps around, encompassing, the existing mortgage is a 'wrap around' mortgage.
• A note that is secured through real estate that does not included the existing mortgage (assuming there is one), is just a regular mortgage in lien position. Ie, asking a seller to carry back some financing, secured with a lien, is simply a mortgage note.

About the title, got it, that makes complete sense to me. I've been to the county deeds office myself and had a look at there system.  I will have a closer look next time I go. 

While the new deed is held in escrow, and a memorandum has been filed for the contract,  this ensures no further liens can taken out of the property in the meantime, in addition to securing the sell. Once I pay the escrow money the amount stated in the contract, the title is automatically released? I wouldn't need any further signatures from the seller, I presume. 

*Edit, one more question about comparing lease options with wrap around mortgages. Besides the option to buy with no obligation, is the only difference between a wrap and lease option the fact that title changes hands only in a wrap and not in a lease option? Are there any major differences?

Since the Dodd Frank Act, is it still possible to assign sub 2 deals to other investors?

@Doug Pretorius Wow, I would understand how that would be much more secure. So, in a land contract, contract for deed where I'm from, I would record the contract with the county, clouding title, in addition to her creating a new deed with my name on it, which an escrow company holds until I complete the sell. We are both protected this way.

May I ask what happens to the old title if a new one gets made. What if something happens and some title work needs done? It sounds like its kind of in limbo, its in my name but held in escrow...

One more general question if I may, an investor named Joe Crump talks about Multiple Mortgages and I'm wondering if this is the same thing as a wrap around mortgage that I come across more often.

The structure of the deal is identical to a subject to, however the seller has significant equity that he would like to take out, in which case a second mortgage is created to the seller in the amount of the equity. If the house is worth 150, but only 100K is owned, then to complete the deal, the seller deeds me the house and a second mortgage is placed on the property for 40K, payable to the seller.

@Marc Winter After learning a bit more about land contracts, I learned that title does not change hands this method. She holds onto the contract while I get equitable title (not legal title). The key point that I don't understand, however, is how putting the contract "held in escrow" until I sell the property would somehow be less risky for me. Also would this also address insurance and other issues you mentioned?

May I ask why it would be harder to refinance a property that is within an LLC?