Fighting to Preserve Owner Financing with the National Association to Protect Private Property Rights

What is Your Livelihood Worth?

It’s not a ridiculous question. As you read this, governmental agencies are actively working to eliminate all but the most basic form of owner financing without being a licensed mortgage originator.

Now industry leaders have joined efforts in the creation of an association to protect property owners, home buyers, and professionals in the seller-financed industry. Read more

Land Contract Buyer Sells Without Owner’s Consent – Real Deal #157

Our readers are the best source of real deals!

Here is one seller’s request for answers when dealing with a sneaky delinquent buyer that sold without consent. Read more

What is a Land Contract?

A Land Contract is a type of owner financing that allows the buyer to make payments to the seller for a home or land purchase. The buyer gets to use the property but the seller hangs onto official title until paid in full.

The contract comes under several names including Real Estate Contract, Contract for Deed, Installment Sale, and Land Contract. It is an alternative way to document the seller financing arrangement from the more common Note and Mortgage or Note and Deed of Trust.

One big consideration with a Land Contract is that the buyer will not receive the Warranty Deed to the property until the purchase price is paid in full. That means the seller stays in control as official title holder while the buyer makes payments. Think of the contract like a layaway program for the Deed.

So what’s the big difference? Well with a Deed of Trust or Mortgage the seller provides a Deed to the buyer at closing, transferring title to the buyer. Then the buyer simultaneously gives back a Purchase Money Mortgage (or Deed of Trust in some states) to the seller for the portion financed. When the amount financed is paid in full the Lien is simply satisfied.

When the seller holds fee simple title using a Real Estate Contract the buyer is holding equitable title. Since the buyer does not yet have the Deed it is almost impossible for the buyer to obtain any type of secondary financing unless the Contract is paid off.

The buyer also risks the seller encumbering or clouding title before the Contract is paid and the Deed released. To provide greater protection, the Fulfillment Warranty Deed can be held in trust by a third party escrow servicing agent

If the buyer quits paying and the seller needs to take back the property, a Real Estate Contract has the advantage of being faster and less expensive than a drawn out foreclosure process on a Mortgage or Deed of Trust.

The accepted use of a Real Estate Contract varies by state. They are common in many Western states like Washington, Oregon, Idaho, and New Mexico along with some Mid-Western states such as Michigan and Wisconsin. However a few states, like Texas, have passed regulations to prohibit use of Contracts for Deed.

A Real Estate Contract can be unrecorded or recorded at the county level depending on local practices. A seller can also sell contract payments for cash now. Just know that some investors may require conversion to a note and mortgage or a note and deed of trust.

A knowledgeable title company or real estate attorney can assist in selecting the best method of documenting the seller-financed transaction.

For more information on buying or selling with contracts read Personal Profit Series: Notes – The Complete Money Making System to Buying, Referring, Creating and Holding Real Estate Notes!

Looking For Notes In All The Wrong Places

You know that song right – the country singer looking for love in all the wrong places?

Well in the cash flow business we are often singing the blues about looking for deals in all the wrong places.

It is a simple fact that to make money in the note business we must first find deals. But time and money are at a premium, so what methods really work? Here’s how to avoid heartache and start finding deals…in all the right places. Read more

Note Buyer Success Story

Canyon Capital has been added to the Directory of Owner Financed Note Buyers. Discover a new investor listing and read how the owner went from start-up note broker to note buyer in just a few short years.

Note Investor (NI) recently interviewed Greg Gehlen (GG) to learn more about his note buying programs. Canyon Capital specializes in mobile homes on land and pays fees to cash flow brokers for the purchase of notes, trust deeds, and contracts.

NI: What is the current focus of your company?

GG: We buy seller-financed first-position lien notes in the Western U.S. Our primary focus is buying partials to still keep deals together that may not otherwise work.

NI: How did you get your start in the note business?

GG: In 2004 I wanted to buy or start a business and after I looked at a number of existing businesses I decided the best option for me would be to start a business. I attended Noteworthy here in Las Vegas and found a wealth of great information (people and materials) at the conference to get started in the paper business.

NI: What unique benefits does your company provide?

GG: We are able to make decisions quickly on files and we also buy notes that many people are not interested in – mobile homes on land.

NI: What type of notes or transactions will your company consider funding?

GG: We buy notes in the Western U.S. which includes WA, OR, CA, AZ, NV, NM, UT, CO, MT, ID, and WY. The type of note we prefer is mobile homes on land (no park paper). We will look at notes up to $150,000 but prefer partials under $50,000. We like to look at credit if possible but down payment, a solid pay history and property value are more important to us.

NI: What type of deals would just waste your time?

GG: New notes with small down payments and poor credit are not files we will fund.

NI: What do you consider the best methods for finding cash flow notes? Read more

Top 5 Articles on Seller Financing

Owner financing was a hot topic in real estate last year and all indicators point to increased demand in 2010.

In search of alternative financing methods, Read more

How I Turned $24.80 into $15,540 on One Mobile Home Note – Real Deal #156

Welcome to Real Deals! It’s always easier to learn from real life so here we share information from actual owner financed transactions.

Sometimes it takes creative thinking to find the opportunity in a transaction. See how $24.80 was turned into $15,540 with a little time and know how. Read more

Secrets of Paper Training

NoteInvestor is excited to share information on the “Secrets of Paper” live training offered by Jeff Armstrong September 18-20, 2009, in Atlanta, Georgia.  Jeff has been operating his successful one-man note brokering business for over 18 years.  We asked Jeff to provide his insights on the current market and how the live training will help note brokers and real estate investors to not only survive, but also thrive in the upcoming year.

Be sure to read his comments and statistics on the increase of seller financing. Are you ready for your share of the note business? Register Now for the Secrets of Paper 201 Training.

Secrets of Paper 201 from Jeff Armstrong

I had a note broker call me up the other day and ask me in desperation, “When is the note market going to change?” With no hesitation, I answered. “The bad news is, Read more

UPDATE on HR 1728: How Congress Wants to Change Seller Financing

There is growing and legitimate concern over how Bill HR 1728 would severely restrict seller financing. Be sure to read this informative update. Read more

Using Owner Financing with the $8,000 First Time Home Buyers Tax Credit

The government is offering first time home buyers an $8,000 tax credit in an effort to stimulate the ailing real estate market.

Sellers can attract buyers by highlighting the refund in their ads, especially when used in conjunction with owner financing. Read more

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