Posted by DB_ATL on December 14, 1999 at 15:36:04:
Interesting. One has to make sure they know the law for their state.
Can I “cash out” then “wrap” it to you? - Posted by Eric Timmes
Posted by Eric Timmes on December 13, 1999 at 09:13:34:
I’m in Texas, and I own a house free and clear.
I want to “cash out” the house then “wrap” the
loan & house to a new buyer?
Any body done that before?
Thanks,
More than once - Posted by Bud Branstetter
Posted by Bud Branstetter on December 14, 1999 at 10:00:38:
Eric,
One of the question becomes is this a homestead or an income property? If it is a homestead the home equity loan now allows you to borrow up to 80% of value. If it is an income property then the mortgage company will go up to 80% but charge in the 10% range even with good credit.
You speak of wrapping the new loan. Why not sell with owner financing then sell some portion of the payments? Choices, when there is an underlying loan, are to use a contract for deed if the buyer is unsophisticated or to put the title into a land trust and contract for the beneficial interest.
Re: Can I “cash out” then “wrap” it to you? - Posted by Steve-Atl
Posted by Steve-Atl on December 13, 1999 at 10:02:23:
Should be no problem to get a loan of 80% of its value, if you have a job and decent credit.
Rather than wrap to a buyer, consider a land contract or agreement for deed. That gives you more control because title does not pass to the buyer until the contract is fully paid.
Re: contract for deed - not allowed - Posted by Eric Timmes
Posted by Eric Timmes on December 14, 1999 at 15:01:54:
Hi All,
I appreciate your suggestions about (contract for deed) but Texas law prohibits sellers from collateralizing loans with property that is also being financed under a “contract for deed” agreement. However, if I structure the deal as a “wrap”, I hope can still do it (legally). I’m hoping to hear from somebody out there who’s done something similar (Legal-wiz where are you?).
Thanks anyway
Re: Can I “cash out” then “wrap” it to you? - Posted by DB_ATL
Posted by DB_ATL on December 13, 1999 at 18:41:26:
My georgia real estate manual, the one used for the state exam says that on a contract for deed the seller retains “naked” title, and the buyer has “equitable title”. The seller does not retain total control. The deed is the item that does not go to buyer until the property is paid for. When the buyer has equitable title, the seller probably would have to forclose in order to evict a delinquent buyer.
Re: Misunderstood? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on December 14, 1999 at 15:52:08:
I think Bud meant for you to refi, then wrap the new loan with a contract for deed when you sell. Then you could sell some of the payments under the contract for deed for cash.
By the way, Bud lives and does all his deals in the Lone Star State. (Probably a dang Cowboys fan, too)
Stacy
Re: Not necessarily true! - Posted by Eric Timmes
Posted by Eric Timmes on December 14, 1999 at 15:14:26:
Hi,
That’s only “conditionally” true in Texas. Foreclosure is required ONLY if the buyer has paid more than 45% of the original purchase price. Prior to that amount, the seller may simply “cancel” the contract for non-payment.