Posted by Sean on June 13, 2000 at 20:59:33:
Most likely your first mortgage is ‘due on sale.’ That means if you sell your house the mortgage company has the legal right to call the entire amount you owe them due and payable.
There are a lot of articles in here about how to avoid the due on sale clause. I think you should start there.
Have a house to “wrap” and looking for advice… - Posted by Tom
Posted by Tom on June 13, 2000 at 18:13:39:
All,
My associate currently owns a piece of property which he has renovated. As a result, the FMV = $205,000. He purchased the property for $176,000 two years ago and is looking for a way to create some long term cash flow rather than selling outright. Currently he holds a first mortgage on the house with a monthly payment of approximately $1400.
My question is this:
If he advertises and successfully screens a candidate for an owner (him) financed deal where do we get the documents to write up the note? Also, what is the best type of note for this type of transaction? Is he better off just selling the home and taking the increased value?
I realize that these are the questions of a “newbie” but they are from one honestly doing his homework and not wanting to get burnt the first time out.
Thanks everyone, this site amazes me every day.
-T
Re: Have a house to “wrap” and looking for advice… - Posted by Michael Morrongiello
Posted by Michael Morrongiello on June 13, 2000 at 23:48:04:
-T,
You may obtain documents at several web sites, and or even at the office store for a “garden variety” document. I don’t recommend these the first time out without at least having a competent real estate attorney either reviewing them or simply pay them for drafting them (nominal costs). As was stated by Sean, you have to be careful of the “Due on sale Clause” if one exists in the underlying mortgage that you wish to wrap. You can look at a putting the property into a trust, or contract for deeds, agreement for deeds, or a lease option as a way to “sell” the property and attempt to get around the due on sale clause in a covert way. There are varying degrees of risk associated with each of these methonds.
To your success;
Michael Morrongiello