Posted by Rainbow on May 11, 2006 at 16:37:15:
I also believe that this is standard practice for hard money lenders…but I don’t know that for a fact.
Selling on land contract - Posted by bvs
Posted by bvs on May 07, 2006 at 12:31:35:
I own a house in Michigan in a pretty bad area that I’m desperately trying to unload. It’s a nice house, but like I said, bad area so it’s not attractive to people who can really afford to purchase real estate. I bought it about 2 years ago to remodel and hopefully turn for a bit of a profit, but I let myself get to much invested in it.
Because I already have more into it than I can realistically get out of it, I’m attempting to sell this house myself. If I can do that, I can live with the $ I’ll lose, but if I have to pay 6% realtor fees it’ll be a finacial disaster for me.
The only real solid offer I’ve had by doing this is by a property investment firm that wants to buy it on land contract and turn it into a rental property. Now the guy who owns the firm is a nice guy and he seems very legit, but this makes me VERY nervous.
What he wants to do is buy it on a standard land contract for about what I’m asking and make payments to me for 1 or 2 years (I can choose) During this time he’ll pay taxes and insurance and basically own the property. So he’ll be giving me about $300 above what I’ll be paying on the mortgage every month.
At the end of the 1 or 2 year term, he’ll pay me the balance.
His rationale behind this is that he wants some capital up front to improve the property above and beyond what I’ve already done to it. (and it does still neeed a bit of work) and he owns several other properties in the neighborhood and wants to control as much as he can to keep the values of those properties up.
Now if this all works out it’s a very lucrative deal for me. I get my asking price, + interest for the duration and I get out of this deal immediately. However, if I have to forclose on him it could be a NIGHTMARE, especially if he’s rented it out.
I’ve checked the investment company’s credit and it’s good, and I’m leaning towards doing this for a 1yr term. But I’m seeking some professional advice. Does this sort of thing happen in real estate? Or if I should run as far away as I possibly can?
Remember it’s in a pretty bad area.
Thanks, and sorry for the length
Re: Selling on land contract - Posted by dutch
Posted by dutch on May 08, 2006 at 17:41:44:
Buying and selling on land contract is done all the time. It is a very legitimate way to buy/sell property. Just make sure you have your attorney go over the contract and promissory note (get both).
Dutch
OKHomesavers
Quit Claim Deed & Selling on land contract - Posted by Rainbow
Posted by Rainbow on May 11, 2006 at 12:43:23:
I’ve heard from more than one source (I’ve never done it) that you can have them agree before hand, in the contract, that if they default on the note (details to be included in the contract and the note) they agree to deed you the property back in-lieu of foreclosure.
Something else to ask the lawyer, and you better have a lawyer included in this deal, sounds interesting, but like every long term contract, it can backfire.
Re: Quit Claim Deed & Selling on land contract - Posted by dutch
Posted by dutch on May 11, 2006 at 13:04:05:
Yes, you can do that. Will it stand up in court, probably not. But if they do it and vacate, you most likely will not end up in court.
there is risk in anything you do. manage it.
Dutch
OKHomesavers