Yes this is the reason it’s interesting at all. It can also be beneficial for taxes. I never liked it because it seems like a bad deal for the buyer in a way. Say you put down 20k, pay down the loan half way and then something happens and you can’t pay. You can’t sell and recoup your investment.
Bingo. If he has a big chunk of money to put down he should just go get a loan.
That being said there’s a local guy around here that’s made a fortune selling starter properties to people and then reselling them again when they default. I’m sure he’s got a legal contract out his kazoo. So yeah I’d make sure to get a good lawyer involved.
Lots of banks won't finance bare property no matter what your credit score is. Found that out when we bought this place. We were lucky and had a friend with the bucks to finance it for us
Did it from the other side. Put every penny I could beg or borrow into it, and then Uncle Sam sent me elsewhere six months into what was supposed to be a 2 year controlled tour. Chopped off my quarters allowance, and cost me the property, and everything I'd invested in it. The landowner/seller got it back with my improvements; power pole, well & well house, driveway, etc. It was a good deal for him. I had to have the mobile home dragged off his property, and moved into town, and eventually sold for what I owed on it, too. Took me years to pay off my Grandma, and the USAF, who decided they'd overpaid me on the moving allowance to the place. That was to be my retirement home, but it was not to be, blast it! It was 7 acres in NW Florida for $7K, back in 1986. Probably couldn't touch it for 10 times that now.
Yes, at the end of the day I don’t want the potential hassles and I don’t like people setting themselves up for that. Imagine having to see someone when you’re the person that took all of their investment even when it’s contractual. Most don’t understand or they do and just think it couldn’t happen to them. I’m also soft and not greedy. I would feel obligated to return some of the investment in a situation like that so I shouldn’t get into it. I told the guy I wasn’t interested in owner finance for several reasons. He never responded.
On a side note...
If you're a worrier (e.g. small things keep you awake at night), I'd pass. Stress is a killer.
Just my 2¢ ...
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If you're a worrier (e.g. small things keep you awake at night), I'd pass. Stress is a killer.
Just my 2¢ ...
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If the party is asking you to accepting a large down payment and finance the remaining debt on a monthly payments--that is, until the full sale price is paid, your risk is his defaulting on a payment, which you can then cancel the agreement, and keep what he has paid as well as the land. But I would definitely consultant a Real Estate Attorney, and make sure that the proposed Agreement is written in your favor, and that the other party understands what he or she is entering into.
My parents sold/financed their house to a woman that made pymts for years. I don't remember all the details. Pretty sure an attorney and contract was required from her. It took years and forever for the lady to pay it off. Seems risky to me.
This! Just be sure that they buyer cannot touch any natural resources (timber, minerals, etc.) unless and until the CFD is completed and he as full title to the property. Using a contract for deed makes it much easier to evict and repossess should the need arise. Also any improvements they may make during the term would also revert to you should they not complete the terms of the contract. A real estate attorney could create a CFD or a good real estate Broker if you know one.
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