All Forum Posts by: Brandon Bass

Thank you @Account Closed. Do you know off the top of your head if this principal amount would be defined as a high-cost loan? I did a quick search and it looks like it may qualify by about 10k but I’m not sure if that’s right. I can always counter with a higher down payment. 

Thanks for all the input so far. My thinking is that someone who is seeking out seller financing is going to have bad credit. As Chris said, if the buyer's credit was good he would go else where and get a loan with better terms. So that being said, what is the value of getting the credit report? Seeing how long it's been since he has been delinquent or exactly how bad the rating is?

I get the impression from people that have done seller financing that skipping the credit check is not that uncommon. The same people also say don't worry, if they don't pay just foreclose and get the house back. I guess I would do that if I had to but it's certainly doesn't sound appealing. I'd much rather have him pay as agreed or just sell it traditionally (but I'm still waiting for that offer).

I also think Chris nailed it because the buyer is self employed. He claims to have 300-400k cash in the bank which I should see when he provides proof of funds. I'm not disagreeing with you guys that this seems risky, just want to give more details to further the discussion. 

I think this falls under private lending but let me know if this shouldn't be posted here.

I have one of my rental properties listed for sale. I received an offer to sell it for full price with seller financing. I can see the benefits of seller financing but I've never done one of these so I'm proceeding with caution.

Here are the terms of their offer:

415k Purchase Price (full price), 20% down

Finance the remaining 332k at 8% amortized over 30 yrs with a 3 yr balloon

2 Questions:

1. The buyer intends to occupy the property. This will be my only seller finance transaction. Does Dodd-Frank / SAFE apply or not? Is there any issue with the short ballon?

2. What assurance do I have, if any, that the buyer will adhere to the terms and make the payments? Is loss of his downpayment the only incentive? He won't let me credit check him and I suppose it wouldn't look good if I did. His Realtor says a lot of good things about him for whatever that's worth, and says he's done a few of these as buyer and seller. Sounds like a leap of faith on my part.


Thanks!

Thanks for the input @Mason Hickman. I do have a loan but I will either pay it off at closing or risk them calling in the note and keep some money available if they do. 

Good point about the exit strategy. I will definitely ask that one when I talk to him later today. He won’t let me run his credit so I think I should try to get a bigger down payment to provide more security to me. 

Does anyone have any opinion regarding the short ballon time (is it legal?) and if Dodd-Frank applies?

I have one of my rental properties listed for sale. I received an offer to sell it for full price with seller financing. I never really considered going the seller financing route, and know little about it, but it does seem to offer some good benefits to all involved.

Here are the terms of their offer:

415k Purchase Price (full price), 20% down

Finance the remaining 332k at 8% amortized over 30 yrs with a 3 yr balloon

Here are my questions:

1. Are the seller financing terms being offered good given the present day market? I feel like 8% is around what someone with good credit could get on a 30 yr fixed loan these days. Is it common to charge a similar rate or should I being charging more/less? 

2. Do I just have to take a leap of faith that the buyer will pay as outlined and not walk away at some point? For proof of creditworthiness the buyer is only offering current bank statements and proof of having paid off a seller financed loan before. The buyer's Realtor said she's done several such deals with this person and that because he's very private and doesn't like banks is why he prefers these types of deals. I don't think I can get any kind of credit check out of him. Should I try to get more down payment money to give myself more protection?

3. The buyer intends to occupy the property. I will only do this one seller financing transaction in a 12 month period. Does Dodd-Frank apply and I need a mortgage loan officer, or does it not? I've read several articles on Dodd-Frank and SAFE act and I'm still confused about when it applies.

Thanks for any help you can give.

Does anyone know if it is possible to buy houses in just my name or my wife's name in an attempt to stretch out the 10 property limit? I had one mortgage broker say yes, properties bought individually are counted separately (meaning we could possibly get to 20). Then I had another say that since this is a community property state if we buy a property in just one of our name's it will still count against both of us as far as the Fannie Mae 10 loan limit is concerned.

I do see wording in the Fannie Mae selling guide regarding debt obligation of a property counting against you even if you are not listed as a borrower so I could see the second mortgage broker being right.

Anyone have an answer for a tie breaker?