Posted by Michael Morrongiello on May 10, 2000 at 12:31:16:
“Creating a note”…
I see many people use this phrase and I am not sure exactly what you mean? If you want to create a note against a property that your already own and then attempt to sell that note, thats considered a psuedo refinancing. In reality there are FEW paper investors that like to purchase paper created in this fashion.
If you meant that you were going to create a note that would result from the SALE of your property in a legitimate arms length sale to buyer, this would be considered a “purchase money instrument” and depending on the terms of the sale and the note or financing provided that type of paper has general investor acceptance.
If you are looking to sell your building and perhaps retain the ownership of the LAND ONLY that the building sits on, then you might consider establishing what is called a “leasehold”. You can lease the land that the building sits on for up to 99 years and create income for yourself and your family well into the future, and STILL sell the building itself. The sale of the building only would be “subject to” the leasehold rigths and provisions of the lease. The tricky part to doing something like this is that lenders are scarce when it comes to lending money on properties that are not owned in a fee simple manner and would be subject to a leasehold. You could however still sell with owner financed terms.
To your success,
Michael Morrongiello