Selling to Investors - Posted by Julie Goyette

Posted by Soraya on May 09, 2000 at 12:06:00:

We buy property in San Diego all the time doing just like these investors have offered you.
However, if I were the seller instead of the buyer I would do the following:

1- Get a credit check on the investor. If the investor is a corporation, they may or may not be listed with Dun & Bradstreet, (if they are listed check their credit rating with Dun & Bradstreet). Also check with the Secretary of State in the state that the company was incorporation to make sure they are in good standing.

2- Sell your property to them on a “wrap-a-round loan” even if you have a $1 seller carryback loan that wraps around your bank loan or sell to them on a land installment contract.

3- Set up an Escrow collection account where a third party collects their payment and makes the loan payment to your bank for them. The third party collection agency will let you know if they are late with their payment. Have them make a payment to the collection agency one month in advance so if they are late it will not affect your credit rating. (You will have nearly 30 days advance notice that they are not making their payments on time.) You could have a hefty late payment charge.

4- Have YOUR attorney draw up the contract to make sure you are protected.


Selling to Investors - Posted by Julie Goyette

Posted by Julie Goyette on May 09, 2000 at 11:23:12:

We own a small brick cottage in need of some repairs and really too small for our family of four. When we bought the house seven years ago we thought of it as a fixer-upper. We did end up doing a lot to the house (new hot water heater, heat and central air, electrical upgrade) but this resulted in having to refinance and now we owe more than we can sell it for.

There are companies claiming to buy houses for cash. These people claim to represent a group of investors and they want us to deed our home to them or do a land installment contract. On the one hand, it would be great to walk away from our white elephant but on the other hand this seems too good to be true.

Is this legitimate and, if so, what are the benefits/pitfalls?