Owner Financing, Is The Dead Transferred To My?
I am looking into properties where the owner is financing. Here are some of the questions I have about this:
1. Is the deed still transferred into my name as with a traditional mortgage loan?
2 Can I made alterations to the property (ie remodles, improvements)?
3. Can I refinance and have the previous owner who is holding the note paid off?
Any help/comments would be greatly appreciated.
tonya5015 :-?
Hey Tonya,
As long as the owner is selling via owner financing, and not selling via a Land Contract or Contract For Deed or Lease Option, then YES, the deed transfers because ownership transfers.
This allows you to make improvements to the property, and yes you can refi to have the owner who sold the property to you cashed out.
One other thing I wanted to mention, is that most owners who sell via owner financing do not realize that they can sell their new note at closing at a slight discount to get cash they would rather have at the closing table, via a simultaneous close. That way, they do not have to carry paper if they don't want to.... and if they DO want to carry paper, but would like SOME cash now, they could create two notes, and sell the first lien at closing, while carrying back the second to enjoy the cash flow and reduce any capital gains tax burden they may be trying to avoid, depending on their unique situation and needs.
I work directly with note buyers across the country and would be happy to answer any other questions regarding this if you wish.
My best to you and good luck, Dave
Thanks Dave,
I have another question, what is Land Contract and Contract For Deed? Like i said before I'm new to this and want to know as much as the REI lingo as possible.
Thanks,
Tonya