All Forum Posts by: Page Huyette

Thanks to all of you who have replied, I appreciate it.

Since everyone has been so speedy and helpful, I'll throw out another question on this seller financed deal.

In working the numbers, one factor I'm considering to determine the purchase price is where I'll need to be for a 75% LTV refi into a conventional when the seller loan comes due. Taking into account rents collected, operating expenses and repairs (using the 50% rule and other know rehab expenses), I'm subtracting the paid principal to come up with what my loan amount will need to be for the conventional. I'm assuming it would need to be 75% of the anticipated value of the property at refi time. Am I on the right track?

So, as long as I use a title co. for the transaction, have an attorney review the contracts and set up a 3rd party servicer, it seems I should be in good shape for a rate and term refi.

In a lot of posts, I'm also seeing the fact that a balloon payment is prohibited due to SAFE. If that is the case (it's a NOO property being bought as a investment) then what is the best way to write up the offer, since it would have to be due after a period of time, say 3-4 years?

I'm looking at a duplex with seller financing and trying to determine the best way to structure the deal so I can refinance at a later date. Upon talking to my local bank about the future refinance of the loan into a conventional, I was told:

Can someone explain if they are both referring to the same lien? And, how is that lien filed -- similar to what a bank would file with the county?

I haven't had a chance to close a deal with seller financing yet, but for what it's worth, here are some loan servicers I've gleaned from past posts on the subject here on BP:

http://www.cashflowservicing.com/real_estate.html
http://www.plmweb.com/LoanServicing.htm
http://www.notecollection.com/
http://www.meracord.com/
https://www.sls.net/about.aspx
http://allservicing.com/

I also contacted the title co. I've used for other deals, and they referred me to a local bank that does loan servicing as well as a real estate attorney that can draw up the contract. I agree with Bill Gulley on this--don't skimp on covering yourself.

Daniel, I found your article to be inspiring. Since we've moved beyond the broker/bank selected appraiser times into the flip-a-coin-and-see-who-we-get stage, my interpretation of your article was to give notice that the buyer can indeed take some control of the situation.

I read this right after coming off a horrendous appraisal for a refi where the newbie that showed up used MY purchase price as a comp, which was way below market, and openly admitted he was having trouble classifying the property the way it was zoned. When the appraisal came in, it was obvious he was green and performing the ultimate CYA. The deal went south strictly due to his timidity and inexperience.

Instead of sucking it up when someone less experienced shows up to determine the fate of a property you want to sell or purchase, if more investors take charge of the situation, it will change.

In my similar case, my local bank wants to see one year tax returns with the rental on them for a rate and term refi.

Spoke with my local lender today who said it would be fine to hold it in an LLC as long as we quit claim before closing. This would limit our exposure during the seller financed period. They would need just one year of income taxes showing the rental income, not two as I originally believed. Learn something new each day.

Jon, are you suggesting that the mortgage payments be paid via the LLC prior to refinance to add some of the necessary credibility to payment verification?

I ask because I am negotiating a seller carry and would like title to be held by my LLC. My concern about this is when the loan is due and I need to refi. Since many banks want to lend to an individual and not an LLC, would I have to quit claim it back to me personally for the refi?

Want to structure it right from the get-go--plan to consult with an attorney before anything is finalized, but would like to get a handle on the preferred approach beforehand.

To chime in, I've been following several posts on seller financing and still can't find an answer to this scenario. At the time when the balloon payment is due, would the seller financed loan be considered a refi by a conventional lender or would the current owner need to acquire a completely new loan with 20-25%+/- down?

In the mongo thread about seller financing:

http://www.biggerpockets.com/forums/70/topics/73257-what-do-you-want-mr-notebuyer

one thing I picked up on is the ability to do this refinance when the loan period ends with the seller carry. If the property has trouble getting conventionally financed from the get-go or the buyer has issues that can't be corrected (not enough for a DP, lates, credit, etc) would the equity in the property (provided there is some) and the tax returns showing a profit qualify this loan for a refi?

Just so I'm clear on what's being discussed here, are we talking about doing a lease to own agreement with a current owner/landlord and then renting it to a tenant rather than it being owner-occupied. If so, I've toyed with this idea but can't seem to answer some of the concerns and questions that keep popping in my head, and therefore would likely arise with the owner.