All Forum Posts by: John Dean
John Dean has started 2 posts and replied 4 times.
Post: Owner financing the appraisal gap
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Hey everyone!
I’m Curious of your thoughts on selling one of your properties while owner financing only the appraisal gap if needed.
For example, let’s say the appraisal comes in 10k short of the sale price. What would be a good example of terms to use in this situation for the appraisal gap owner financing? (If possible)
Post: Seller Financing / loan servicing
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Quote from @Chris Seveney:
@John Dean
Let’s say you are in the 28% tax bracket - after taxes you are making 5% on that money - how much down payment the borrower putting
Would you be better to sell and collect qualified dividend income?
It’s like winning lottery - you take lump sum or annual
When people say well banks do it, the banks can make a $100,000 loan with only $10,000 (fractional lending - which you and I cannot do).
my back up plans to that idea were to either.
A. 1031 it into a new build with far less maintenance costs for another 3-5 years before recycling that same concept.
B. Using the money from selling that home to continue buying ETF’s (paying dividends) and continue offering private money loans to home flippers I partner with.
(but I assume the private lending would put me in the same situation as doing seller finance if I’m typically loaning at or around 10-12% after taxes) would I be correct with this statement?
Post: Seller Financing / loan servicing
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Quote from @Chris Seveney:
@John Dean
If it’s going to be owner occupied then you should use a loan servicer as its required by law in most states and for every incorrect statement you send every month you are committing CFPB violations and if the borrower defaults you are technically not allowed to collect interest - in some states if they have a good attorney and default they could wipe you out in legal fees…
My bigger question is why would you seller finance? If the property can be sold with conventional financing I am on the other side of things (and the minority) they seller financing is a bad idea due to the risk and the returns especially when considering tax ramifications
I’d love to hear more of your opinion on that idea!
Post: Seller Financing / loan servicing
- Posts 4
- Votes 0
Hey all!
I plan to sell my SFH rental. But my plan is to pay off what's left to own it free and clear and do seller financing.
my plan is to offer 15 or 30 years at a normal rate that someone could get from the bank at time of closing. (Most likely considering adding a 7 year ballon.)
Do you suggest letting a loan servicing company handle payment collection/escrow/insurance or are you all handling those pieces?