Owner financing - Most protection? - Posted by Jay
Posted by Jay on August 31, 2003 at 07:53:36:
I posted this on several boards, i hope this does not violate any of this website’ policies.
I would like to know which owner financing option gives the seller most protection. If an owner financed the sale of his/her property with a first mortgage, how can the owner protect himself from having to go through costly forclosure procedures in case of default. Does a “Contract for deed” give that security?
If i buy real estate with a “contract for deed” and plan to refinance after a few months or a year, would the average lender consider the first few months as seasoning? How could it be seasoned since i don’t really own the property, because its only a “contract for deed” which means that the seller keeps the deed until all payments have been made.???
Also, if you “lease purchase” and you decide to excercise your right to purchase after say six months in the contract, would the average lender consider that as seasoned? or do u actually have to own the property before they’ll do a refi.
Is it wise to sell a property with owner financing into a new corporation (LLC) if the seller gets some control of the shares of the corp or a seat or seats on the board, or the shares can be placed in escrow to protect the seller in case of default. this way the seller may not need to forclose, instead he may vote the buyer out and take over control of the corp? Does this make sense or am i missing something?
Thanks in advance and good luck.