Considering owner financing (interest rate, credit, rate, finance)

[Themanwithnoname]

I'm considering building a cabin on the other end of my property (I quite literally haven't been over there in years)
And selling it with a few acres.

Honestly I'd prefer to sell it owner financing not just because I could get more for it, but because of the strong likely hood in this area that I would "sell" it several times (yes, with repairs each time.)
-don't need the money, any delays wouldn't impact my life/lifestyle.

There's a couple guys In this area who who resell the same property every 2-4 years, I don't know them except to wave, but they show a profit.

I'm not sure of the paperwork necessary to properly protect myself (or other things to be aware of) however.... so I thought I'd ask.

[LifeIsGood01]

Originally Posted by Themanwithnoname

I'm considering building a cabin on the other end of my property (I quite literally haven't been over there in years)
And selling it with a few acres.

Honestly I'd prefer to sell it owner financing not just because I could get more for it, but because of the strong likely hood in this area that I would "sell" it several times (yes, with repairs each time.)
-don't need the money, any delays wouldn't impact my life/lifestyle.

There's a couple guys In this area who who resell the same property every 2-4 years, I don't know them except to wave, but they show a profit.

I'm not sure of the paperwork necessary to properly protect myself (or other things to be aware of) however.... so I thought I'd ask.

How would you sell a property several times unless you buy it back?

How do you resell the same property?

Do you mean do a rent to own and wait for them to renege on the deal and then take the property back and resell it again as rent to own?

[Themanwithnoname]

Originally Posted by LifeIsGood01

How would you sell a property several times unless you buy it back?

How do you resell the same property?

Do you mean do a rent to own and wait for them to renege on the deal and then take the property back and resell it again as rent to own?

I should think it would be fairly obvious:
When you hold the Morgage (owner financing) and they default.

If someone pays and pays it off in 15 years... all well and good. But as I said, there's a high demand for owner financed properties (due to people not having the necessary credit mostly) not rent to own, but the result being the same.

[Diana Holbrook]

Unqualified buyers are one reason for private contracts....

Unfinanceable properties are the other.

It can work out well for you either way... Private contract interest is often at least a point above prime... and if they pay it, it can be a good source of income for a number of years. If they don't... you get the property back and you do it again.

[rrah]

I'm just wondering how you know those guys make a profit if you don't know them except to wave?

[kitty61]

Your plan is very risky. Why not rent?

[sirron]

Speaking from experience, I'll never do it again. One turned out well, the other not so much. Subdivide and sell and be done with it.

[SmartMoney]

Planning a profit on multiple defaults is not business plan, but an attempt to take advantage of other's distress. This is not a plan to envy, but the reason consumer laws are written.

[Themanwithnoname]

Originally Posted by rrah

I'm just wondering how you know those guys make a profit if you don't know them except to wave?

If people want to be anonymous they need to live in a densely populated area. In the country you may not see a neighbor for weeks, but everyone knows everyone else's business.

I Call people 5 miles away from me "neighnor", and the short answer is I know what they have in the property, and through becoming friends or being friendly with several of the transient owners (not for that purpose) I know what the notes are.

Another hint is when they keep buying prooerties.

I'm a volunteer Fire Fighter, and do other things in the "community" and when your a certified Landman (know how to research properties) who keeps an eye out for investment opportunities (I'm bidding on a farm that's in a forclosure sale shortly) you keep an eye on the market, comps etc.

So when you go to church with the guy paid to cleanup the place after the default.... you don't even have to really think about it to bring the numbers together and see that it's profitable.

Also: a friend of mine doesn't have a job. He buys a place, and either builds a place or renovates it, then sells it every year or 2.
He's not in a position (that's his job) to owner finance, but through him I know lots of people look for it.

Originally Posted by kitty61

Your plan is very risky. Why not rent?

I'm failing to see how it's more risky than renting. (If it fails to be sold it turns into delfacto renting....and I'd rather sell and collect a decent % for 10-15 years vs it just sit there )

Originally Posted by sirron

Speaking from experience, I'll never do it again. One turned out well, the other not so much. Subdivide and sell and be done with it.

Please share, that's the kind of info (along with how you protected or failed to protected yourself) I stared this thread to ask.

I buy and sell: coins, guns, ATV'S, motorcycles, cars, boats etc. (Haven't broken into land yet.) And while I'm not opposed to an outright sale it seems I can command a substantially higher price owner financing, and get a decent interest rate on the money in the meantime.

Originally Posted by SmartMoney

Planning a profit on multiple defaults is not business plan, but an attempt to take advantage of other's distress. This is not a plan to envy, but the reason consumer laws are written.

Don't be an idiot. I'm not.
I'm stating that if the "down side" occurs and the buyer defaults... I'm not restricted by needing the income in order to make my personal financial situation work.

If someone buys it out right: well and good.

If I owner finance, get $20k more in asking price and collect a higher interest rate than my money can elsewhere for 5-15 years: even better (best case scinario)

But I recognize that often those who owner finance default, and if I'm insured and they leave after paying a few years, and I have to fix the place up and sell it again... it won't hurt me and I'll either break even, or profit more.
And I don't need the monthly income to keep functioning financially speaking.

[SmartMoney]

Honestly I'd prefer to sell it owner financing not just because I could get more for it, but because of the strong likely hood in this area that I would "sell" it several times (yes, with repairs each time.)

You wrote this, I didn't.