Re: Is a L/C a good way to purchase an 8 Unit Apartment? - Posted by Mike Oldfield
Posted by Mike Oldfield on May 09, 1999 at 20:38:09:
If its a good deal you should not hesitate to go this way. (with the advice of counsel of course)
The reason the seller wants to do a land contract is that if you defualt they do not have to foreclose which is expensive. Since the deed remains in their name until the contract for deed has been satisfied, on default they have the option of a simple, fast, and inexpensive eviction.
In my state (NY) they are getting sticky here. I have heard of cases where the courts are now saying that contracts for deed must be treated similar to foreclosures and also that the former owner must reimburse the buyer for the fair value of improvements if the deal goes bad and eviction is used but blah blah blah etc.
If its a good deal go with it. THe end results should be identicle. Nice cash flow, equity build up, you carry back for retirement to a new young hungry investor like you used to be. Happy World!
The benefit to you is that the seller has less risk and is therefore more flexible. Hurray!
One more thing. Watch out. You may be dealing with a sharp old timer who knows how to play or an old time dork that has outdated info. It depends on how your state treats these contracts for deed.
I love 'em because I can sell the shi_ out of my proposal to the seller because they have almost no risk that you, the investor will screw it up. If you do, they have your down and your improvements and this throw you in the street.
Write if you need more
P.S. Make sure you find out why the seller is flexible so you dont inherit his problems unless you want them.
P.P.S. Land contract offers are sometinmes an indication of a lack of flexibility. If you god forbid plan on a substantial down payment or a substantial risk of another kind, insist on getting the deed in your own name. In this case contracts are OUT!