Posted by Chris in FL on March 31, 2006 at 14:18:26:
Drew, I don’t understand what you are asking. If the house is worth more than what you owe on it, and you have a preapproved tenant-buyer, and want to cut ties, just sell it. At closing the title agency pays off your loans, and closing costs, and gives you whatever is left over (or, if you owe too much, you would have to cut a check to be able to close the sale). Simple. Be aware you likely have to pay taxes on the total profit you made (including the cash you pulled out previously), though there are ways to reduce or defer that.
If you were somehow able to over-leverage (borrow more than the house is worth), then you have a tiger by the tail, and might need to explore options. If it is likely to appreciate, you could hold it until the value goes up. Not sure I understand your take on owner financing - is the tenant not preapproved, as I thought you stated previously? Or, are you going to get a higher price if you owner finance? You can owner finance with the existing mortgage in place if you want, using a wrap-around mortgage, but if you don’t know much about owner-financing you should study that some (right and wrong ways to do it to protect yourself and maximize your profit, i.e. - banks can collect points when originating a loan, and you probably can too). If you can find it, I made a post on this sight earlier today with some advice about holding a mortgage (certainly not everything there is to know, but a few pointers). Ed Garcia, who teaches and frequently is on this board, is a guru. I will send you a private e-mail, with my phone number, and if you need more answers I will TRY to help. Hard to discuss in detail because I don’t completely know the situation. Anyhow, good luck.