Selling Rehabs By Owner Financing
Hello,
I am a newbie doing homework in hopes to start rehabbing properties.
In specific I am looking into originating a loan for selling a rehabbed property
Steps
- get authorizationi and run the credit report of prospective buyers
-pick the buyer with the highest credit score and submit their info to a mortgage investor (the investor may require a quote request form to be filled out)
- originate the mortgage and sell to the investor
Has anyone had experience selling their rehabs using a method similar to this? From your experience is it faster than listing with an agent? (mortgage investor is more flexible). Also would this method be too complicated for my first rehab?
Thanks,
Wayne
I know many note investors like to work with rehabbers in this way. Perfectly fine way to go, but you will be getting a discount , so your numbers have to either look really good to have the discounted first cover your costs and acceptable profit, or you have to be willing to carry back a smaller second, like a 10, 15 or 20% loan.
The second scenario, in a simultaneous close situation, can provide you with cash up front and a good note if the numbers work for you.
Note brokers who have you fill out a quote request form without doing full due diligence are wasting your time.
You need to have a note broker who asks the right questions up front of the best pre-screened buyer, and takes an actual 1003 app, plus other info as needed to get a firm commitment in place. Too many brokers offering "quotes" that are pie in the sky, and then they send them to other brokers and on down the line (daisy chain).
See my profile for more info if you want. Thanks, Dave
Wayne,
I'm in the process of selling one on a note right now, and doing a duel close. Investors are looking at a interest rate of at least 8.5%, I have been told that 9-10% percent is prefered, but who wouldnt want that kind of return. . Be prepared for a pretty stiff discount. mine is about $15000 dollars. be sure your profit margin can handle that kind of hit. All in all not to complicated, note buyer will step you through the procees. contact me if I can be of any further service to you. Good luck.
Ross Kimbell[ Edited by RKIMBELL on Date 03/09/2004 ]
Hi Kimbell,
May I ask in what range the amount of the loan is?
Depending on that I am not sure if I would be interested. I expect a discount, but not too much.
Did you at all consider keeping the loan and not selling it? Did you have the buyer sign a release and run a credit check on them?
Thanks for your reply.
wayne
The interest rate is one factor impacting the discount.
The equity above the note, the credit score fo the borrower, the term of the note (no balloons if you want the best price) are all factors.
Note buyers can step you through.
Watch out for note buyers who have problems freeing up the cash.
John
Ross,
Send me an email. I tried to view your profile so I could send a message to you but the system dumped my back to my main page.
John
Quote:
On 2004-03-09 00:18, RKIMBELL wrote:
Wayne,
I'm in the process of selling one on a note right now, and doing a duel close. Investors are looking at a interest rate of at least 8.5%, I have been told that 9-10% percent is prefered, but who wouldnt want that kind of return. . Be prepared for a pretty stiff discount. mine is about $15000 dollars. be sure your profit margin can handle that kind of hit. All in all not to complicated, note buyer will step you through the procees. contact me if I can be of any further service to you. Good luck.
Ross Kimbell
<font size=-1>[ Edited by RKIMBELL on Date 03/09/2004 ]</font>