I think you would be better off selling the home at the get-go and then selling the note after a year if you need the cash.
I will try to explain:
What I would like to do is self finance and write a note that would pay off very quickly. The most expensive homes I currently have are worth $25,000. With $3K down and $250/month, it would be paid off in little over seven years – a decade sooner then 21st Mortgage with a similar monthly payment.
When looking at a more typical home worth, let’s say, $15k it would work out to $3k down and $250/month for four years. I could discount the note by something like $1k after a year and sell it to someone at an attractive 8% rate if I needed the money sooner then the 3 remaining years.
Or if I charged the buyer 5% on the $12k mortgage, that would add 6 months of payments but, after a year, I would only have to discount the note $500 to give the note buyer a 8% return. And I would be off the hook in just 42 months. Not 21st Century’s 204 months.
Using the self finance model, the lower cost homes would pay off in just a couple of years or so. I would have my money back and the buyers of the homes would be owners, free and clear, and only responsible for lot rent.
We both would be in better condition to weather one of life’s storms.
But can I self finance and be on the right side of the idiot law? My SD attorney says I can. Everyone else says no.