Posted by allen muller on November 17, 2000 at 17:52:33:
I NEED MORE INFORMATION ABOUT DEVELOPING A LAND CONTRACT,AS I HAVE A HOUSE FOR SALE BUT THE BUYER DOESN’T HAVE CREDIT TO BUY THE HOUSE AT THIS TIME. CAN YOU HELP?
Land Contract / TD value vs. Mortgage value - Posted by Keithk2
Posted by Keithk2 on January 16, 2000 at 12:28:32:
Recently I had a conversation with a note buyer who offered to table fund a note that I was creating as part of a rehab purchase. The seller was offering Land Contract terms for the property but my note buyer told me to have the deal structured as a conventional mortgage secured note.
I’m curious. Is there a difference between the value of a conventional mortgage note and a land contract assuming that there are no differences in price, terms, credit worthiness, etc.? As far as I know, a land contract in Michigan is easier to foreclose on than a conventional mortgage loan (takes less time). What other factors are at work here?
Thanks for all of your help
All Success
Keith
It Depends… - Posted by Michael Morrongiello American Note
Posted by Michael Morrongiello American Note on January 16, 2000 at 21:34:57:
Keith:
You are correct in many states a land contract type instrument is easier to foreclose than a motgage security instrument. However one major drawback in using a land contract as opposed to a mortgage or trust deed secuirty instrument is the ease of transfer of the latter over a contract and the fact that deed transder taxes many times ( if applicable) come into the picture when dealing with a land contract which adds the additonal expense for having you pay deed
tranfer taxes twice. Once for your deed transfer to the funder associated with the sale of the land contract and then again for the deed transfer taxes due when the land contract is fufiled and the deed needs to be transferred to the buyer.
With a mortgage or trust deed, its a simple assignment of one’s rights, titel, & interest in the security instrument and there is no additional hassle in having to deal with deed transfer taxes nor have the worry about actually taking title to the property.
Most note funders are flexible, American Note will purchase ANY kind of security instrument including land contracts, agreement for deed, mortgages, trust deeds, etc.
Michael Morrongiello
Operations Manager
Re: Land Contract / TD value vs. Mortgage value - Posted by David Alexander
Posted by David Alexander on January 16, 2000 at 14:39:58:
Depends on who your selling to. Institutional Investors generally dont want to own Real Estate, they just want to own paper. With the Land Contract you own the underlying Real estate and wrap it with the contract giving the buyer equitable title. Just depends on who your selling it to, and whwther they mind owning the underluying Real Estate.
David Alexander