OfflineAre you having trouble selling your rehab project in today's market? Why not offer seller financing? You can sell the property for top dollar faster. The best part is that you don't have to wait for the payments to come in over time, because you can actually sell your seller financing to an investor who buys these.
Yes, you can sell your seller financing to another party for a lump sum of money right now!!! What you sell is your note to a note buyer!!! Now, note buyers do not buy just anything. The notes they buy must meet thier investment criteria or else they will not buy it or offer a lot less then what the note was created for.
In todays current market, most note buyers will want to buy notes collateralized by residential or commercial real estate. With residential real estate they will want to see credit scores 625 or higher for a top dollar offer. Anything below that they will start discounting their offer.
They like to see LTV's of around 80-90% of LTV for residential properties with credit scores of 625 and higher. If you buy your rehab deal and rehab for low enough, you will have your loan bought for top dollar and profit when the note buyer buys even if they offer you a discount.
A note buyer can offer a full purchase or even a variety of different types of partial purchases. A partial purchase will offer to buy a certain portion of payments for a smaller discount. You will see less of a discuont from partial purchases then full purchases. You can sell portions of your note over time.
It is another option to consider.
Happy Hunting!!!
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
I have been thinking about just this subject. I have a few questions for you. Who needs the 625 credit score, the seller of the note or the person who bought the prop on the owner financing? How many months of payments do you think the note buyers would like to see before they buy the note? Do you offer the note at a discount or do you wait for them to make you an offer? Thanks in advance for your time in answering all my questions.
Cathy
Cathy B
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http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...
Hi Cathy,
I don't know if you got answers to your questions, but I'll give it a try. (1) The note buyer is interested in the "Payor's" credit score (the person actually living in the house and making the payments). (2) Typically note investors want to see about 12 months (sometimes less) of payments, this is called "Seasoning". (3) You wait for the note buyer to make an offer...you want as much as you can get for the note; however, the note buyer is also interested in his/her Return on Investment (ROI), but in the end it can be a Win-Win situation: You get cash to do more investing (cash is king), and the investor gets a deal that will yield a desired ROI. I hope this helps and anyone else can chime-in if I'm off base. Cheers, Carl
Cathy,
The seller needs to make sure the credit score is in the range of 625 to sell their note for top dollar and the note buyer wants the credit score to be 625 to buy a less risky note.
If you are a rehabber doing these notes...they require 12 months seasoning right now. In the past it has been more lax.
If you are not a rehabber doing this and it is a poreprty you have owned for a while such as a rental etc then they will look for 3-6 months of seasoning on average.
The note buyer will do all of the discounting. You will just have to provide the information they request. Teh more documentation and payment histry you have the better.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Thanks to Carl and derling for answering my questions. I appreciate it.
Cathy
Cathy B
Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...
You're Welcome Cathy....Awesome Post derling...Thanks!
Carl
The easiest way to have a viable note is to have the note written by a professional note broker. They will take into consideration the required attributes of a note that will allow you to sell even it is'nt curred. That way you will get top dollar for your situation.
Steve
Your Welcome Cathy!!!
There are a bunch of document prep companies that will make sure that all of your documents meet the federal and state laws that apply to your seller finance transaction.
Infact, if you sell a certain number of properties in one year with seller financing, you will need to abide by certain Federal and State laws. These could include RESPA, TILA, and many more!!!
Some of the professional doc companies I know of that do a good job are Magic Docs, Tradewinds, and Desert Docs!!
Glad this post helped!!!
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125