Seller Financing using Obama money
Due to the cash shortage and low credit scores of potential buyers many investors are using the eight thousand dollar government tax credit as a down payment on their property, and putting the buyer in a credit repair program.
The investor will then sell the home on a land contract, wrap around mortgage, all inclusive deed or some other form of seller financing.
It is really up to the individual investor as to how to structure the land contract. But if the investor decides to sell the land contract to a Note buyer, the note will have a greater chance of being sold if the land contract holder prepares the note properly.
Our office prefer to see notes with long term financing 20 -30 years, fully amortized with a balloon payment due in 10 years.
In Ohio there are attorneys that specialize in these forms of transactions. They will assist you in the preparation of the land contract collect the obama money directly from the Federal government, conduct all the due diligence to make sure you will get paid!
Once the land contract has been executed you can either hold on to the note as a long term investment or have the payor of the note either refinance you out with FHA lending or other conventional financing.
We have noticed that FHA and other lenders are increasing their credit scores and done away with most Stated loan programs. As a result many savvy investors are taking a small discount on their notes and selling it for cash.
IF one decides to discount their private mortgage note for a lump sum payment, please keep in mind that the Note buyer will require a certain yield. I would suggest that you contact a Professional Note buyer before you structure this type of deal. They can be very resourceful in assisting you with preparing a good saleable Land Contract.
Far too often we have seen many situations in which the investors are not able to sell their notes, because it was prepared improperly.
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