Dodd-Frank Fed Law that’s now been “suitably” and dutifully enacted by all 50 states* basically says that a REI who’s in the buy, fix & sell SFR game can no longer finance his buyers w/o a specific license in his state.
I’m advising all REIs who’ve heretofore dealt with “residential” (1-4 units) that they’d better find and read their state’s version of SAFE law to see if they have to get license or if they’re exempted
Our WA State version is found under our Consumer Loan statutes.
*Fed Law said that if a state didn’t do this HUD would do it for them.
In general how does this apply for a buyer like me looking to buy multi-family properties on land contract? I bought 4 properties like this last year.
[QUOTE=Brandon (NE Indiana);885016]In general how does this apply for a buyer like me looking to buy multi-family properties on land contract? I bought 4 properties like this last year.[/QUOTE]
Brandon,
Define multi-family as you mean it? 4 units and less or more than 5 units?
Both 
Last year I picked up a 3 unit building and 3 duplexes.
Im looking to do a big deal in a couple of years for either a package of 7 duplexes or a 12 unit complex.
[QUOTE=Brandon (NE Indiana);885045]Both
Last year I picked up a 3 unit building and 3 duplexes.
Im looking to do a big deal in a couple of years for either a package of 7 duplexes or a 12 unit complex.[/QUOTE]
Brandon,
I was asking because the rules tend to be different for commercial vs. residential. I am not saying that the specific law sees a difference. Just that the idea behind protecting a consumer does not apply when the deal is business to business.
Check your state laws to see if you are harmed by the law. Also consider moving away from deals where you are looking for the economic benefits of commercial property yet what you are looking at does not cleanly fit the definition.
SAFE covers resid HOs
Generally speaking SAFE was designed and enacted to protect that HO who’s going to live therein, not intended to cover that REI who’s going to use it for rental.*
And as J Corey alluded to, “residential” multi-plex is 1-4 units and excludes 5 or more multiplex.
*B’s sworn affidavit that he’s buying for rental and will not use for his own home would except that S from SAFE compliance.
[QUOTE=John Merchant;885060]Generally speaking SAFE was designed and enacted to protect that HO who’s going to live therein, not intended to cover that REI who’s going to use it for rental.*
And as J Corey alluded to, “residential” multi-plex is 1-4 units and excludes 5 or more multiplex.
*B’s sworn affidavit that he’s buying for rental and will not use for his own home would except that S from SAFE compliance.[/QUOTE]
A good summary John.
Thanks for your advice i will keep in mind while i will take any kind of loan from the bank. Thanks once again.
