All Forum Posts by: Michelle Boss

Another female developer?! Hooray!! I’m @L.MichelleBoss on LinkedIn. I will look forward to the connection! 

Rob,

I'm in a similar situation with entitled land but in the hospitality sector here in Livermore, CA. You didn't mention if you have experience building, selling and facilitating Sr. Living, but either way you could try speaking with existing owner/operators groups in the greater bay area, or even central coast, looking to expand their portfolios for a joint venture.  Also, if you have any local Senior Support organizations, they may have a long list of families looking for senior living.  Future residents could essentially buy out their units and fund your build.  Senior Living here is in short supply and high demand - good luck!  Happy to chat offline about introductions to G.C.s with connections to investor groups, and some of my experiences with different fundraising groups as well. 

Hi Dawn, You didn't mention why you advertised your rental to a couple of local investors. I agree with a prior comment that you may want to list the property on the market to get top dollar. However, some of the advantages of seller financing include potentially a faster close of escrow, lower / no listing broker commissions, and fewer underwriting requirements for the seller to deal with = easier / faster transaction. A higher sale price can be obtained with seller financing, but I doubt investors are going to pay top dollar. They are looking for a deal. If you come to agreeable terms, my advice is to use a licensed broker to assist with the Promissory note and file the First Deed of Trust lien. That would be your only tool to remedy non-payment down the road. Make sure all the filings are correct with the County re: the title. There are plenty of experienced private money brokers on Bigger Pockets that can do that for you. Some brokers offer servicing the loan as well so you file the correct forms each year to the IRS, provide proper statements each month / year to the borrower, and have experience with the foreclosure process if needed. Happy to recommend my favorite as well if you need one.

Along the sentiments of previous replies, your first concern is pretty straightforward to address. Ensure your agreement has no pre-payment penalty.

In my experience, private money loans (which is what this is, as also previously explained in prior responses) typically come at a higher rate ~ 8%-12%.  Owner carry back can have advantages to both seller and buyer. However, ultimately, make sure you have a viable exit if you can come to a mutually beneficial agreement. 

@Jeff Verreault SF Bay Area Wine Country

Interesting analysis and topic! I currently have a commercial land development property on the market and am currently offering owner financing. The reason I am offering this is to make a sale easier and close of escrow faster for a potential purchaser. What I would do with the sale proceeds, as pointed out in your post, is reinvest in a first deed private money loan anyway. Why not make an interest return on this property right away, which I already am familiar with and favor, without having to find another property to re-invest the sale proceeds? A few terms that will make this owner financing work for me as the seller: 50% down on the purchase price (it is raw land fully entitled and permit ready to build) and taking the 1st deed position. I can offer an attractive interest rate for my borrower that we are both happy with, and zero points to originate the loan - also beneficial for the buyer. As with all first deed trust loans, my rule is to only invest in a property I wouldn’t mind owning in case of default. Worst case scenario, I own the land again, have paid off my note on it, and made interest income off of it. That is why owner financing is very attractive and favorable in this case for me as the seller.

Jennifer, 

Highly recommend “Wealth Without Cash” for creative financing ideas - if you have not already read it. 

Without knowing anything about the deal… have you considered owner financing or private money?