Posted by Bud Branstetter on October 28, 1998 at 11:58:51:
Let me see if I get this right. David is going to contract with M.H. Seller to buy for 35K and sell to Bob and Mary for 50K consisting of a 35K new mortgage and 15K second. Bob and Mary also have a SFR that David A. contracts for a 60K sales price consisting of 40K assumable 1st + 15K owner financed second and 5k cash. David A. can sell to D. Buyer for 65K. If the D. Buyer has 5K cash down and assumes Bob and Mary?s 40K FHA loan and a 15K second it should not be a problem.
I would sell to D. Buyer on a wrap of the FHA and Bob and Mary?s 2nd so I could get a better rate. If you were doing exactly the same terms you could cancel out the 2nds but I suspect you make more on the wrap. By transferring the equity you created with the MH you did not create equity in the house. You created a note that you will get payments on. D. Buyer has the house and the obligation to pay.
I am not sure where the 20K amount comes in or where you feel there is 25K equity. 15K profit out of air in the form of payments, yes. I?ll only charge you an extra $5 a month to service because you?re a good guy. I feel sorry for the title company that has to figure this out. (Not really.)
PMT AMT/mo. David to B&M (15K 2nd on house)
PMT AMT /mo. B&M to David (15K 2nd on MH and land)
PMT AMT /mo. D. Buyer to David wrap (FHA+15K 2nd)