How To Create Mortgage Note
hello,
Currently, I am rehabbing a property that will have about 30k+ equity in it when i am done. one of the neighbors wants to purchase it and rent it out himself and asked me would i hold note. I told him I open to it.
oh and the loan currently on it is from a HML.
Now I am wondering whats the best way to start this:
1) refi the HD and do a wrap around mortgage?
2) let them refi the HML and i carry a 2nd?
3) refi cash out 90%LTV and just let them do a sub2?
Im not really sure where to go with this one. and advise, suggestion or references? thanks
When selling to a landlord via owner financing, with a HML underlying, why take on any recourse?
Simply sell to the landlord with 5% down, and then at closing you can simultaneously sell the new 95% owner financed note as well, cashing you out at the most minimal discount possible, so you get a fast sale, accommodate the buyer in front of you, and get a nice profit, and move on to the next deal.
Hope this helps, Dave
Well since I'm not in the note brokerage business (no disrespect to Dave who is a nice guy and a good business man) I'd structure it a little differently. I'd let the buyer finance as much as possible given his credit and resources and then take a small second. If you then wanted to sell that second, even on a simultaneous closing, that would be your option.
Although C'king is right in that you could take back a 2d, you should understand there's really almost no market for selling those little 2ds.
They're called "throwaway 2ds" in the note world.
I'm also trying to stucture a 2nd with the buyer getting the highest LTV and me a 10% 2nd. How can I get sell this position if it's "throw away"? It's worth 53k. My buyer has a score of 700+ but very little cash. :-?
OK I heard something from James Smith last week on seconds. He stated that there was federal regulations in place that allow the holder of a defaulting second mortgage to assume the first mortgage without qualifying.... IS this so?
If so it does open up a whole new world for notes
I a wondering if buying the worthless 2nds at a discount and then foreclosing on them and assuming the 1st might not be viable?
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"Chance favors the prepared mind..."[ Edited by Stockpro99 on Date 01/29/2005 ]