owner financing and foreclosure - Posted by Ben (FL)

Posted by Dan_NC on April 14, 2000 at 08:06:09:

You know, I remember hearing about this idea, without the Land Trust, 8-10 years ago & had forgotten all about it. It intrigues me (again) & would like to learn more. Do you know where I can get more info? Publications, web sites, or is it in anyones course? I like the idea of hanging in there to benefit from the appreciation in my area without the Landlord headaches TIA, Dan

owner financing and foreclosure - Posted by Ben (FL)

Posted by Ben (FL) on April 13, 2000 at 15:05:34:

I have taken the money and run on a couple of properties I know could’ve been long term cash cows if I had owner financed either first or second mortgages, because I am concerned about foreclosure. My cash flow hasn’t gotten to where I can quit my j.o.b., yet, and holding a dead cow for 3 to 12 months while trying to foreclose would be a hardship. Am I missing something about owner financing (in Florida, if it looks like a mortgage, and it acts like a mortgage…it’s a mortgage, so Contract for Deed doesn’t help)? Any thoughts would be helpful.

Re: Not to bet a dead cow, but… - Posted by Bill Gatten

Posted by Bill Gatten on April 13, 2000 at 21:20:58:

If you were to take a property into a “3rd party trustee, co-beneficiary title-holding [land] trust,” then assign a portion of your own beneficiary interest in that trust to someone who would live in the property and handle all the maintenance and management costs, you’d have one of the best holding vehicle ever devised. And…because the “tenant” sees him/herself as the “owner” with all the rights, incidents, privileges and benefits of an owner (including tax write-off), they’d pay you perhaps as much as 120% or 150% of normal rent and eliminate all of your negative CF, vacancies, maintenance and repair costs, etc.

When we do these, we get: 1) created equity at inception (buy for “X” and create a value of “Y” for the incoming co-beneficiary, 2) cash up-front (the co-bene pays all closing costs, including a few thousand to you, 3) a positive cash flow (whatever the payments are, you add another hundy or two for you); 4) a share in the equity build up front; 5) principal reduction 6) a share in (or all of) the appreciation; 7) all of the passive tax write-off; and 8) all your money in tact to continue acquiring more real estate while you pack your portfolio.

Just a thought…

Bill Gatten