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Started By
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Owner Finance for home
Posted on 5/4/24 at 12:14 pm
Posted on 5/4/24 at 12:14 pm
I have a condo in NOLA. Apparently it's hard to get financing. I owe nothing on it. Real Estate agent said potential buyer is interested in me financing. 20 percent down 4 year balloon at 7 %. Couldn't find anything on it on the board. What are y'alls thoughts? TIA
4
Posted on 5/4/24 at 12:36 pm to Lithium
Are you renting it out now?
You may have to foreclose when that baloon comes due, if not before from lack of payments.
Not sure I'd transfer title/ownership until paid off.
You may have to foreclose when that baloon comes due, if not before from lack of payments.
Not sure I'd transfer title/ownership until paid off.
Posted on 5/4/24 at 2:37 pm to ItzMe1972
Considered it when I couldn’t move mine about 10 years ago. Spoke to a few people, but decided against it and finally just took undertaking to get away.
This could be an important question. Apparently, if you owner finance and the buyer can’t finalize the deal, the buyer can seek a refund on the amount they paid over however much they would have paid in rent during that same time frame. So knowing rental rates now can be crucial and important to know so you don’t spend the excess and are now stuck needing to refund the buyer
quote:
Are you renting it out now?
This could be an important question. Apparently, if you owner finance and the buyer can’t finalize the deal, the buyer can seek a refund on the amount they paid over however much they would have paid in rent during that same time frame. So knowing rental rates now can be crucial and important to know so you don’t spend the excess and are now stuck needing to refund the buyer
Posted on 5/4/24 at 3:58 pm to Lithium
My ? Would be if they can't get financing how do they plan to fund the balloon payment in 4 years? Seems like you are carrying the risk for 4 additional years while they get any market upside/appreciation. If there is are maintenance issues a large special assessment or market value drops.you'd be stuck with the bag. How friendly is local jurisdiction to tenants versus landlords/financiers? Would foreclosure/eviction be straightforward and quick or drawn out and costly? If you have to take "their" home back be prepared.for it.to be trashed out of spite or just neglect.
Caveat, thats just few concerns off top of my head. I dont have any specific insight into.local market, owner financing or condos.
Caveat, thats just few concerns off top of my head. I dont have any specific insight into.local market, owner financing or condos.
This post was edited on 5/4/24 at 4:00 pm
Posted on 5/4/24 at 5:03 pm to Lithium
I'd also.want to know more about why/if "apparently it's hard to get financing." Is it a matter of finding buyers that qualify or is there a reason mortgage companies arent approving condos in your market? If true, seems like it would seriously depress the market and lower selling prices. If it's a matter of finding qualified buyers agent should have better idea of how long that tends to take. Maybe theyre just trying to rush sale for a quick commission if youre not a motivated seller perhaps you could wait. Or, structure the deal to compensate you for the risk.premium and opportunity cost of keeping your capital tied up instead of invested in higher yielding securities and/or better diversified than in a single real estate holding for only 2% interest premium over what you can get in a HYSA doesnt seem worth risks unless you dont anticipate other viable buyers. Thin if the bank isnt willing to loan them at that rate why would you especially considering it would be a much higher concentration for you than a bank.
This post was edited on 5/4/24 at 6:12 pm
Posted on 5/5/24 at 6:38 am to Lithium
My FIL did this with a low end property and the woman declared bankruptcy. Dealt with the bankruptcy court for years.
It was a huge PITA to deal with when he passed away. I don’t understand the appeal if it’s an otherwise rentable property that’s paid off. If she can’t get credit shouldnt that tell you something?
It was a huge PITA to deal with when he passed away. I don’t understand the appeal if it’s an otherwise rentable property that’s paid off. If she can’t get credit shouldnt that tell you something?
Posted on 5/5/24 at 7:06 am to SquatchDawg
No way I would do it at those terms. Maybe 30% down at 10-12%.
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