Owner Financing On A Subject To Property
Has anyone ever tried to owner finance a property that they own subject to an exisiting mortgage?
I currently have a property that I purchased subject to a mortgage. I have a couple of individuals interested in the property and they have asked about whether I'd be able to offer owner financing.
Since I'm new to this, I've been reading up on the topic, but would also appreciate any first hand knowledge you may have with doing this. How would you establish terms for owner financing? What type of down payment would you require? Is there a basic formula to follow or do you just make it up as you go?
Thanks....
Hello wagtre,
YES, you can absolutely sell this property via owner financing very quickly.
You need to collect at least 5% down, and then you can structure and simultaneously sell that new first lien at closing to realize cash profit, and pay off the underlying liens that you purchased the property with.
All owner financed paper is purchased at a discount, and pricing on these kinds of deals tends to come in around 80-90 cents on the dollar, and as long as credit is decent (around 600+) it can be a stated type program. Pricing can get slightly better, but it will become a full doc program to ensure the note buyer is paying a warranted amount of money for the file.
Any other questions, let me know, best, Dave