Owner-financing can encompass a few things, but in its purest form the Seller agrees to take regular payments (generally monthly) at a fixed interest rate for a number of years with an amortized loan. The Buyer gets the property, but the Seller gets a recorded secured note (mortgage or trust deed) on the property and can foreclose for nonpayment (under whichever state law the property is located in). The Seller becomes the bank, so to speak. An Agreement for Deed/Contract for Deed/Land Contract is also considered owner-financing, but it can avoid foreclosure in some states (Seller only has to evict) .
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"A deal is only as good as the quality of your Contracts." --Me[ Edited by LeaseOptionKing on Date 11/30/2004 ]
Owner-financing can encompass a few things, but in its purest form the Seller agrees to take regular payments (generally monthly) at a fixed interest rate for a number of years with an amortized loan. The Buyer gets the property, but the Seller gets a recorded secured note (mortgage or trust deed) on the property and can foreclose for nonpayment (under whichever state law the property is located in). The Seller becomes the bank, so to speak. An Agreement for Deed/Contract for Deed/Land Contract is also considered owner-financing, but it can avoid foreclosure in some states (Seller only has to evict) .
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"A deal is only as good as the quality of your Contracts." --Me[ Edited by LeaseOptionKing on Date 11/30/2004 ]
so does the debt stay in the owners name or the investors name