Posted by Laure on June 03, 2000 at 06:51:54:
I would look for a buyer who can cover your payment. Has some downpayment, and NO CREDIT. It’s much easier to wait for them to establish their credit, than it is for them to “fix” their credit. After I sign the deal with them, I take them straight to my mortgage broker. I sign first, because if they find out they are not in that bad of shape, maybe they will want to choose a different house, and all my work with them is a waste of time. Anyway, I go with them and get the straight poop from the broker. WHEN CAN THEY FINANCE OUT? And I tell the buyers, it is not my intention to steal their option money. If they are not, or cannot become, in a position to purchase this with a conventional loan within a year, I will tear up our papers. They ALWAYS agree. They don’t want to lose their option money either.
Sometimes, if I am a little pushy about going right over to the broker. They say, I thought this was owner financing? Yup, I say. I finance for a year. And if you really want to buy a house, this is the way it works.
I’ll tell you. I have a rehab I finished in Jan this year. I was overly anxious to move it. I took a L/O Tenant without running them through my broker first. Big Mistake. When I did take them to the broker, and saw their situation…was I shocked ! I don’t believe they will ever get financing they find acceptable. FICO score of 550. They were offered a 14% loan, which they refused. Said they’d shop every bank in town and these people were thieves. Well, the more they shop, the more their score drops. I tried to tell them that. So, until Jan 2001, I just sit patiently collecting my rent, oh, and I AM making a cash flow of 400/month. So, it’s not all that bad. And who knows? Maybe this guy (who is a minister) will have manna fall from heaven !
Good Luck.
Laure 