Advantages Of Owner Financing W/ 5 Yr Balloon?
owner wants to retire. has 14 units (10 apts, 2 hotel rooms, 2br mobile home, and 3br house) on 15 acres. She would consider owner financing with a "decent" downpayment, but would want to be cashed out in 5-7 years. Is there any advantage to this, as opposed to just trying to get financing now? I have no money to put into this deal, so the downpayment would have to be private money. any suggestions/comments?
Advantage is that it is not on your credit report. If you default she will most likely only go after the property. Your FICO score will not be affected.
Your exit strategy must be clear before you buy.
You may be able to lease option with $15K down and $(PITI+2nd mort)+$200 as monthly payment, with selling price of $298K in 24 months.
If seller makes all payments while you put this deal together, you will do OK.
$15k now and 29K later.
This plan may work for you.
Dan
It is not right, but many RE investors get stamps or witnesses after the fact., and yes it make for an invalid deed.
In pre-foreclosure situations, if the homeowner threatens to sue most inestors would just give them the deed back - fake stamps or not. If the homeowner in a very distressed situation, especially a homeowner that is still in the house, wants the house back, it is hard to fight them.
You buddy will probably just quick claim back to the owners, never go to court, and never spend any time in the slammer.
Brenda
Just an interesting factoid - when ever someone threatens to go to the local TV investigative reporter, you know they are not taking any legal action. The TV investigative reporter is just a fantasy that they have in their head and it shows they have done nothing. I had a tenant once who was threatening me with a lawsuit and I really was concerned, until he started going on about going to the TV reporters. Then I realized he was just moving his jaws and not his ass.
I too am a notary, and John Locke is correct about all of the requirements to witness the signatures and the documentation to keep regarding how you identified the person signing the papers. I know this is required in my state also or it is considered an invalid document. EB