Posted by Bill K. - FL on June 23, 2000 at 15:44:58:
DK,
It’s hard to believe there are still some areas that are a buyer’s market with the way the economy has been booming and attractive interest rates etc. Are you in a rural area perhaps? A buyer’s market is definitely the time to use owner financing. Ideally, you want the first to be no more than 80-85% LTV with a minimum buyer down payment of 10%. Better to get 15-20% down if you can. Since you are offering no bank qualifying terms, try to sell for the full appraised price. Keep your int. rate at 10-11% min. and try for 15 yr term. If there is a payment objection go longer and add a 5-7yr balloon. With timely payments they should be able to refi or sell before the due date. With only a 10% dn payment you could structure the first at 80%-85% LTV and hold a 5-10% second with a similar balloon. I doubt you will have much competition from other sellers offering “owner financing/no bank qualifying”, so headline your ads with that. Good Luck.
I have been trying to sell one particular property for about 5 months now, and I’d like to get your thoughts/suggestions for a method to sell this property right now.
Here is a little background. The market is a buyer’s market here in my area. The property appraised in Nov. 99 for $144,000. I paid $85,000 for it. I got a hardmoney loan to buy and fix, which I now owe $89,850 to my investor. The interest rate is steep, 15.99% for 30 years with a 24 mo. call. I recently had the property on contract for sale at $130,000, with owner financing. The terms were 5% cash down, balance of note at 10.5% for 30 years. I was trying to keep the payments below $1200/mo. because of the market here. But this deal just fell through because the buyer agreed to try to get bank financing (which was just approved), but last weekend wanted to move in before closing but did not want to give me a months rent in advance, with $40/day prorated when we closed. And then now claims he found another property with owner financing at 7.5%. We are now down to resolving the issue of a $1000 earnest money. All of that is okay with me. I just want to move on and sell immediately. I need to pay some other obligations and getting this deal done ASAP will help put me into a position to obtain a large line of credit to buy notes. I need to clear a minimum of $35K.
What might you suggest to quickly sell this property and clear this minimum? I am not opposed to offering owner financing with intent to sell the note for cash and pay off the hardmoney lender. Obviously a buyer with a new loan would be better. What ideals might you offer to create a very attractive note for the next property buyer, and subsequent note buyer to achieve my goal? And how would you advertise the proposed deal? Please help!