creating a note - Posted by Larysa Olejnik

Posted by Michael Morrongiello on February 22, 2000 at 15:36:11:

When a property owner sells their property to a buyer and also finances that sale by taking back a purchase money mortgage, trust deed, or land contract as the case may be, a “seller financed or owner financed” transaction has taken place.

The resulting mortgage that the seller takes back can in most cases be easily and readily converted into CASH either at the time of closing when the property is sold or shortly thereafter. Of course the amount of Cash paid for this paper will depend on certain variables (Type of property, the buyers down payment, credit and employment background, actual repayment terms, etc.)

If I understand you correctly you want to purchase a property and instead of having the seller take back a SELLER financed mortgage you are wanting your associate or friend to take back the mortgage. That would not be considered owner financing or seller financing. Your associate would be simply originating a LOAN and acting as a LENDER.

Paper that is created in this fashion has the stigma associated with it that it is not “squeaky clean” as far as transactions go. Because of this stigma many note investors will NOT purchase this type of note deal. A few investors myself included will consider these types of deals as long as the level of exposure is conservative into the property.

Clearly it is best to have the Seller or owner take back the financing and then if they want or need cash for them to sell it and convert it into cash.

Michael Morrongiello

creating a note - Posted by Larysa Olejnik

Posted by Larysa Olejnik on February 21, 2000 at 21:36:44:

Can somebody tell me if I could buy a piece of property by owner financing the property that I want to buy to somebody else by creating a note and then selling that note before I actually buy the property?? Would this work?