Owner Financing and lease options

What is owner financing When a property from the current home owner and they carry back a mortgage for the property, or a portion there of.

What are the advantages to buyer? Little or no qualifying Negotiable terms Credit not a factor Flexibility to meet needs Very low closing cost Speed of transaction

What are the advantages to the seller Speed of transaction More attractive to buyers Typically get more for property Spread out tax burden Secure investment w favorable return

Type of deals that fit this type financing High equity properties Free and clear properties Story about Than lining up so many deals that we couldn’t keep up with More money in your pocket – interest rate of 10-12% vs. 15 and points Less work – no standard qualification process, less paperwork Quick Funding - once relationship is established, funding in days if not hours (Chris G. example, call today, money in tomorrow) Limited personal liability – no personal guarantees

What to watch out for Carry back mortgages as a second mortgage. ***primary lender will not allow this

Required Documents - mortgage - personal promissory note Hazard insurance policy Title insurance policy

Lease Options

What is a lease OptionWhat When have a lease on a property and at the same time have an option to buy the property. ****these should never be in t he SAME contract.

Advantages of lease option finanacing- for buyerbuyerdvantagesAA Little cash out of pocket for buyer No exposure/ liability of actual ownership Speed of transaction Ease of controlling property Very low closing cost Can set up sandwich lease option for cash profit and monthly income stream Three profit opportunities

Advantages for seller More available buyers Maintain all tax write off benefits Can get cash up front and monthly cash flow Non-refundable option fee Higher quality tenant buyer than traditional tenant. Can pass on many ‘owner ‘ responsibilities on to tenant buyer

Major opportunitesMaj Can test a market w/o buying Can control a lot of property w little cash Can put off funding a property untill fully rehabbed Can creat great cash up front, back end and monthy

The End!