All Forum Posts by: Michielu Menning

Quote from @Karen Chow:

Did they tell you that if you put 25% down, that they would do a traditional owner financing with title transfer? I think that it's pretty common that contract for deed is low downpayment, no credit check, and that owner financing is higher downpayment, more vetting of the buyer.

Yes, going traditional financing was an option. But I liked the lower downpayment (15%) and lower interest rate (6.75% vs 8%+). They also did a credit check, checked my employment, and contacted my referrals as part of their vetting process

Update: just talked with my agent and I learned the seller has over 10mil in assets and will put in the contract that they will pay off their mortgage with cash if for whatever reason, the property is about to foreclose

- there's also no due-on-sale clause on their mortgage 

- I will get an attorney to look over the contract

Hello, I am currently contingent on a Contract for Deed duplex and am getting pulled both ways on whether going Contract for Deed is a good idea or not. 

Situation:
- 3 years at 6.75% with a balloon at the end. We can pay the contract early and get access to title earlier if we want
- Property is in a very desirable area of town and I'm not worried about it getting rented.
- My wife and I have very good jobs and I have no doubt we will always pay our dues to the seller, even if the property doesn't rent for 3 years
- The seller (an LLC) has done multiple Contract for Deeds and has their process down. I heard they did ~5-10 contract for deeds the past year
- My agent and their team is very positive about this entire transaction. They talked about the risks, but feels very bullish
- My father-in-law is extremely stressed about this since we won't hold the title if anything goes sideways. He's very detailed and has done well for himself and his family, so I respect his decision and his general expertise.
- The selling price is not over-inflated. The CMA is right on the sale price
- My payments to the seller includes a 25 year amoritization rate, so my monthly "mortgage" to the seller(300k with interest) is greater than their current mortgage. (200k with the same interest rate)
- Going the regular financing route (25% down) is not desirable since I would need to dip into my primary residence HELOC for the downpayment. I put 15% down for our deal, and it gives us more flexibility for the future
- The template for the Contract for Deed is the general Contract for Deed for the state of MN (where I reside)
- We are getting title insurance and ordered a title commitment to confirm there are no liens or claims on the property

I feel like I've educated myself on different seller financing, and understand Contract for Deed protects the seller more than the buyer, so I understand why the seller is going that route, especially if selling Contract for Deeds is how they do their business.

I've talked to my agent about putting defensive measures into the Contract for Deed - such as enforcing the seller uses our payments to pay down their mortgage and letting us (the buyer) get notified from the bank if the seller misses a payment etc. 

Of course, this doesn't protect us if the LLC goes bankrupt and the property gets foreclosed that way.

Even with all of this, my FIL is very adamant that this is a bad idea. He says to minimally get an Attorney to work for me instead of relying on my agent and our title company, since they're all get compensated on the deal getting done, not necessarily fighting for my protections.  Is he being overly cautious or is he onto something?

Does anyone have any thoughts or suggestions? 

Thank you for reading! 

Update: I found the city's zoning map, and the property was zoned approprately. 

However, after talking with the city planner, I learned this couldn't become a duplex for two reasons: 

1. The lot size was too small. The city required the lot size to be at least 5.8k sqft, but it was 3.1k.

2. The neighborhood was also too dense and the block was over capacity for multi family rental units. 
  

Hello all, there's a single family property I'm looking at in a neighborhood/city that has plenty of multi family duplexes.  The property already has two kitchens and looks as if it could very well be a duplex. At first glance, the property is looking like a bargin, but the more I look into what it takes to change zoning, I'm becoming more uncertain.

Does anyone have experience on changing a zoning from SF to MF? If so, what were some of the steps you took? Anything I should look out for? The town requires plans, proposed text, detailed narrative, and design guidelines before they'll accept the proposal. 

Thank you!

Since this is my first post, I see now that this looks highly suspicious. I am not associated with this group in any way, and wanted to bounce it off this community before I dismissed them.  Thank you both for confirming my suspicion!  

I came across this company that gives out loans of all duration and amounts. They sound very flexible.  A representative posted in a FB group saying they're doing 100% financing at a 6% rate.

They sound too good to be true, and usually when things sound too good - they probably are.