Owner finance or not? Help! - Posted by Lani

Posted by Lani on April 01, 2006 at 21:37:46:

Thanks for the suggestions… this site is awesome. I am looking into the EHTrust because this is the first I have heard of it and I have new hope on the “little old house”!

Owner finance or not? Help! - Posted by Lani

Posted by Lani on March 30, 2006 at 16:11:34:

First investment property, so a “newbie” here. My husband and I purchased a home well below market value for cash 1 year ago. Upon buying it our first objective was to rent it out for a short time to get some cash to do some improvements- done. The next course of action was to continue renting it out and do a 2nd on it to pull cash out to pay off high interest cc’s. We ran into problems here because we currently have a high debt-to-income ratio so we could not get financing for it. Hence this has changed our shift to selling the property rather than keep renting it out (it is an older home with “issues” so we aren’t crazy about waiting to see what could go wrong with it).

The problem begins: there are a few issues with the house that limit our “buyer pool”, issues that we are not wanting to fix: it has a dirt crawl space so it doesn’t qualify for FHA, has an older electrical system so it probably wouldn’t pass an inspection not to mention it is has been treated for termites. Sounds like a nightmare right? But wait it does have features that make it “sellable”, it is on a double-corner lot with alley access (very rare in the community), elbow grease and upgrades have made it visually appealing, it is in a great neighborhood that is within 1 mile of churches, elementary school, college and state park and the market in this community is seller-friendly. That being said should we put it on the market hoping someone who either has cash on hand will buy it or someone who can get financing without an inspection or should we offer partial “owner financing” to increase our “buyer pool”? Any suggestions would be greatly appreciated!

Re: Owner finance or not? Help! - Posted by Innovator

Posted by Innovator on April 01, 2006 at 20:38:42:

If you’re open minded enough, an equity holding, beneficiary directed land trust (EHTrust) would work great for you.

Re: Owner finance or not? Help! - Posted by dutch

Posted by dutch on March 30, 2006 at 21:50:56:

I agree with John. The problems are not insermountable. Plus, NEVER second guess a buyer or a seller as to what they want or are willing to do. Let them tell you. If you ASSUME, then you’ve limited your options.

If you take owner carry, that opens up the buyer pool. Structure the note correctly and you could sell the note for real cash.

Good luck.


Re: Owner finance or not? Help! - Posted by John

Posted by John on March 30, 2006 at 18:46:23:

Why can’t a buyer go convential instead of FHA. Fha loans have their place but it seems in my area only a small amount of loans are FHA. All the houses on crawl spaces here are sand with a moisture barrier (plastic). Depending on where you are every house should be treated for termites, that in itself is not a deterent. If you wish to sell put it on the market, if you wish to carry a 2nd for monthly cashflow do so. If you would rather be cashed out completly that works also. If you plan to list with a real estate agent, talk to them about your concerns. I do not see big problems here as you describe it.