Owner Financing Question....
I am planning on selling my apartment in new york. I am not sure if it is worth it to do owners financing. I am going to require a 20% deposit. I'm not sure what interest rate I should charge for 15 years term. If it is 6-8%, then that means my money will be tied up for 15 years at a cap rate of 6-8%. With that money I can invest in other properties and get atleast a 25% roi after all expenses paid. Did I just answer my own question? FYI: the buyers are my tenents. They have been my tenents for the past 3 years. They are always on time if not early on their monthly rent. I am selling because the board as of next spring are not allowing any rentals in the building. I had offered owners financing to them earlier because I still have a lease contract with them until next december. Not sure how I can retract the offer now. Or do you think I should? Any suggestions?
Not sure if your apartment is a co-op ro a condo. I own two co-ops in NY and financing is a pain. Expect a long delay if you're buyers are going through a bank. Another possibility would be to have them go through a bank for part of the loan i.e. 60%. Do owner financing for 20% (i.e. 7% amortized for 30 years paid back in 5 years) and have them put a down of 20%. You get a higher rate of return than if you put it into a CD or mutual fund for 5 years and they get easier financing since the bank only lends on 60% of the value.
Doll:
If it's a condo then simply amend their lease DON'T RETRACT.
Place title to your condo into a Simple Living Trust.
Silently (notarize but skip recording) an Assignment of Benefical Interest to your Tenants converting them to Owners have Residential Beneficial Interest inthe APT.
They can show this Trust Ownership Docs to the condo board if Questioned or susspected that they are mere 'low-brow' Renter types!!!
The Condo Accos. won't know what the docs represent anyway even if they have a JD.
Researching and then challnging the Trust and Laws surrounding it are enough for the HOA to just ACCEPT your Tenants as "OWNERS!"
A simple living trust is a start you will also need a properly structured title-holding element added to it.
Any questions and I'd be delighted to assist you!
Derrick Ali
Thanks for the advice derrick, but unfortunately it is a coop. Any solutions for a coop?