I have a property under contract and the seller want to a land contract instead of owner financing. I don’t really see an issue with this.
However, are there any things you think should definitely be in the agreement?
For one, there are about 9 park owned homes. I think we would just allocate amount that goes to them to satisfy and release title to the people we sell them too, and then the remaining comes to us?
Make sure you are aware of any outstanding loans, liens, other title issues. Are taxes current, will you pay taxes, or will they?
I would highly recommend a title search done by an attorney.
Thanks for your input there…
Speaking on, would you do a Phase 1 - wouldn’t you probably have to pay for another before a refinance (5 year balloon)?
I guess I don’t follow. You mean a Contract for Deed, where the warranty deed is held in escrow, payments are made to/from an escrow collection account? That’s the only way to do it and be fair to both parties.
Once again, I have to say, SEPARATE THE POH’s. Make a completely separate deal for them. (They aren’t real estate anyway, so they shouldn’t be in the Contract for Deed.) Put them in a separate LLC from the park. Have a separate installment sale contract for them with the seller. Don’t price them in reference to income, price them in reference to their value today where they sit. Most used homes are not worth more than $10K, but seller’s often try to price them based on income, at the same cap rate as the real estate. You can’t pay $30K for a 20-year-old remodeled single-wide.
Always do a phase 1 at purchase.
Try to get the seller to owner finance it for you.
Having a deed now is far superior to being promised one in the future.
What happens if the seller passes away or becomes unwilling to transfer the deed?
Yes, you can sue. But that costs time and money.
We seldom buy the same way we sell.
Keep us posted,
Mike Weiss
mweiss1031@gmail.com