How To Make This Sale Happen - Posted by Larry

Posted by Wayne (MD) on March 07, 2001 at 08:36:24:

I?m just thinking on paper here so read this in that light. Your need for cash and your experience with the tenants will be important in the following possible solution, however if they have been dependable, you might consider:

  1. Determine the amount of a legitimate down payment, such as 10% ($2,850).

  2. Have them come up with as much as possible toward that amount, say $1,000.

  3. Write a contract for deed for 90% of the purchase price amortized at, say, 9.5% which would be $215.68 per month.

  4. Write a note or a second on the balance of the down payment, $1,850 in this example, and have them pay that off at 14% over a 1-year period at $166.11 or a 2-year period at $88.82.

  5. When the down payment is paid off, have them finance through traditional channels.

The disadvantage is that you don?t get all your cash up front right away. The advantage is that you?re getting a nice return on the equity and have been resolved of landlord responsibilities.

I have one tenant I would do this for in a heartbeat; I have others I would never consider such a plan for.

Wayne Carpenter

How To Make This Sale Happen - Posted by Larry

Posted by Larry on March 06, 2001 at 22:22:11:

Thanks for the great site!!. I have some renters in a house
that have approached me about selling to them.

i owe approx 16,500 on the house and they will purchase it
for 28,500.

Their credit is not good but he can borrow 3000 against his
retirement 401 or whatever for a down payment.

I could sell this to them on a contract for deed but im not sure it will satisfy terms of a sale for the down payment to be released.

I would be willing to carry a 2nd for them if my loan
was satisfied at my bank.

I need some help as to how to approach this. Maybe there are some lending institutions that will give them a 60%
and i will carry the other but im not aware of any in this
small area we live in where conventional bank financing
seems to be the standard.

Any referrals to a place where i could turn them on to or contact for them would be appreciated.

Thanks Larry