All Forum Posts by: Kathleen DeNault-Ridge

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I know it’s an old post...but, interested. Following....

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@Brian Spear so...the Deal Finder's Formula is the only training program currently available through MHA?  Is it currently available or is it being revised?  If not...is there an ETA?  I've just finished the MHU Homestudy Course...which was excellent, especially in the areas of due diligence and operations.  It seems that the MHA course may be a good addition to the MHU info especially in regards to acquisitions.  I'm interested in signing up with the MHA course ASAP.

Kathleen

Larry...thank you for the response.  I'm not sure sure about my risk tolerance in this situation.  I have seen land investors using a combination of lease agreement and an option to purchase contract to achieve essentially the same results approximating "owner-financing"...presumably with less risk associated with using Land Contracts in KY.  

In this scenario, the lease agreement (renting) is separate from the option to purchase contract.  The parcel is not conveyed until the option to purchase contract matures (which may be several years) and the renter fulfills the contract.  The rent paid during the prescribed rental period could be considered "rent credit" and put towards the purchase price (locked in at the time the option to purchase contract is signed).  

I know the concept of "rent credits" raises D-F concerns, however...it is my understanding that D-F regs do not apply to raw land.

I probably need to consult with an RE atty in KY to assess the legal issues involved with these contracts.

Would you happen to have a recommendation for a good RE atty...if so, could you PM me?

...Thanks

I understand that using a Land Contract in Kentucky (a judicial foreclosure state) is not advantageous at all for the seller due to a legal determination from the late '70's...apparently:  a Land Contract is essentially equivalent to a mortgage instrument thereby giving the buyer "equitable interest" in the property once any payments are made.  As such, if the buyer defaults, a judicial foreclosure is necessary.  

This process is expensive and can take 6-12 months.  Working with raw land parcels...the rate of buyer "flake" on terms deals could be higher than other asset classes.  With Land Contracts in Kentucky, the seller cannot simply "take back" the parcel once a buyer stops making payments.  Rather, the parcel will need to go through a judicial foreclosure sale (with attorney involvement) in which the flaked buyer can actually benefit due to their "equitable interest" in the parcel (based payments they have already made).  Land Contratcs do not appear to be a reasonable method to sell land parcels in this state.

However, I do see raw land investors selling on "owner financing" in Kentucky.  For those whom are offering owner financing, how are you structuring these transactions?

I am in the process of crafting a seller financed deal on an improved land lot to serve as a vacation rental.  It is in an area with a strong and proven tourism industry.  The improvements are:  approved building lot, underground electric and cable in place, a good perc test, and a gravel drive way to potential home site.  It all fits into my model well.  

The owner is willing to finance and is asking about what terms I'm thinking about. I did find a credit union willing to finance land with 25% down at 7% interest for 10 years. Although I have strong credit and could do bank financing, I would prefer seller financing as it keeps my credit and DTI clean leaving me open for other financing if i need it in the future.

What do typical seller financed deals look like...I don't want to present something really off base and insult the owner.  What are the typical interest rates and length of loan on seller financed deals?  How is the deed handled with seller financing...does it transfer to me as the new owner at the onset of payments like a regular home purchase with a mortgage?

I do not plan on working with a buyer's agent as I have already done the leg work for the property.  I will use an attorney to draw up the necessary documents when the time comes.

Thanks,

Kathleen

I'm looking for a referral for a real estate lawyer to write an offer for a vacant land purchase in NY state.  The property is intended for future small Rv park/campground development.  I want to make sure that all of the necessary contingencies are included.  I am located in PA however: the property is in NY state.

Thanks

yeah...I'm aware of the typical terms with hard money lenders. As this is a cash flowing property which will be purchased way below market price, the entire debt service (the conventional first and the hard money second) will be covered with the existing income from the property. If that fails, I will still have w2 income that could easily cover the hard money loan. My questions are more about the usage of private/ hard monies to supplement my down payment capital and the logistics of getting it in place for the POF needed for the bank financing.