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I was approached by a real estate investment co. who wishes to purchase my home with owner financing. Past posts on here seem to think it is feasible. This is what they said,
"We are looking for Executive style, Luxury properties that we can buy with short term owner financing. We will pay fair market value, but we just need a little time to cash you out in full. Really an installment sale, or delayed cash-out.
A typical term sale would be 5 to 10% down (sometimes more), a reasonable monthly payment (which includes taxes and insurance), and a balloon payment when we cash you out in full. Terms average around 24 months but we've been able to close as quick as 6 months out to 60 months.
We will not live in the home; rather my company represents buyers who have all the 'right stuff', but just can’t get a conventional loan right now for a variety of reasons. We work with them until they do qualify, and before we do negotiate with the end-buyer we have them fully vetted, or screened, through our credit dept, mortgage broker, income and asset verification, identity history, background and criminal record (CORI) check. Our end-buyers are quality people, but just need a little help from us, and a little time for us to finance them. We present you with each buyer’s portfolio, and you choose which buyer you like."
Should I get involved in this? My gut tells me no.
Your gut is telling you NO for a reason. Let's just say you go along with it......they move into the home and tear it all to hell and back and don't make the payments. Then what??? You have a legal nightmare on your hands AND a mortgage company waiting for SOMEBODY to make the payment. Guess who that is? YOU!
If someone can afford "luxury, executive" style homes, they should be able to pay for a home with cash or conventional financing. Apparently they don't have the "right stuff"
Sounds like a scam to me. Or at the very least, a very poorly managed real estate investment company if they can't afford to actually pay for their investments. If they want to fund their business, they should be looking to commercial financial sources, not the owners of the properties they are saying they want to invest in.
These types must scour the MLS, looking for listings that have been on a long time, and try to get desperate sellers. I will stay away, I'm getting anxious but not that anxious.
These types must scour the MLS, looking for listings that have been on a long time, and try to get desperate sellers. I will stay away, I'm getting anxious but not that anxious.
You chose.............wisely.
An "investment company" would buy outright without a complicated owner financing scheme unless you needed to do something to minimize your tax hit, but you would be setting that up, not them.
"...We present you with each buyer’s portfolio, and you choose which buyer you like."
Should I get involved in this? My gut tells me no.
You're wise to be wary of this entire scenario. A lot of things just don't add up. If they're really paying full market value, how do they make money? Just flipping the house to someone else doesn't cut it. And why would they have you approve any buyer? If they were really buying the house, they would not need your approval to sell it to someone else.
On the chance that they are on the up-and-up, they need to figure out a better business plan.
I would be curious to read their proposed "purchase" contract. I suspect their contract would not be to buy your house at all, but to buy them some type of option so that they could find a purchaser at a higher price. Too many unknowns...and it just sounds suspicious. Walking away was a good decision.
It sounds like somebody read one of those books...
"How to get rich in real estate on somebody else's money"
which generally involves finding a sucker.
It's a spin-off of the We Buy Houses franchise.
I saw it on the back window of a Lexus SUV:
**WE BUY HOUSES** (WITH YOUR MONEY)
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