Announcement

Collapse
No announcement yet.

Owner financing land?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Owner financing land?

    I've received an offer to buy a tract of East Texas land that I'm open to selling, but only if I owner finance it. I've never owner financed anything before, but the title company says that it's common and easy/safe.

    Other than having an attorney draw up the paperwork, and getting >10% down up front, what else is suggested to minimize my risk?

    Are there any pitfalls to watch out for?

    #2
    Watching, wish I could help.

    Comment


      #3
      One thing I would worry about is why can't they get their own financing? If they have 10% in cash and decent credit they should be able find a lender. If their credit is horrible then I wouldn't want to finance them anyway. Just my .02


      Do you have this land posted for sale? What County?

      Comment


        #4
        If they were low risk, they could likely get more favorable terms from a bank. There must be a reason they want owner financing. Be cautious.

        Comment


          #5
          they are probably trying to get a better interest rate than what they qualify for. If you don't need the money for the land up front and you calculate the interest you will end up with more money in the end. And its nice to get that check in the mail every month. Also if they quit paying you can foreclose on them and get the land back.

          Comment


            #6
            No risk... They can't pick the land up and take it. If they default on the loan you can foreclose on it. A lot of times owner finance requires or request 20% down...

            anymore info on the land for sale?

            Comment


              #7
              Originally posted by dstrong View Post
              No risk... They can't pick the land up and take it. If they default on the loan you can foreclose on it. A lot of times owner finance requires or request 20% down...

              anymore info on the land for sale?
              This makes sense to me, but I wasn't sure that foreclosure was an easy process.
              If they can give 20% down, I'd feel a lot better about it.

              The land isn't listed for sale. It's 20 acres +/- in Jasper, recently cut.

              Comment


                #8
                I sold my place in ETexas and I offered owner financing. My realtor handled the credit check, helped me with the restrictions, (he cannot sell any timber, gravel, clay, etc. without my permission) Of course I had my lawyer draw up the deed restrictions and payment schedule. My reason was the interest he’s gonna pay if it carries the full 15 years and the fact that in reality, it’s still mine until he pays it off.

                Comment


                  #9
                  Yep. I wouldn’t ever rent to own a house, as the can destroy it and the value pretty easy. Raw land is pretty hard to devalue though. Finance it, and worst case scenario you get your land back. Best case scenario you make a pretty good chunk off the interest.

                  Comment


                    #10
                    Originally posted by Drycreek3189 View Post
                    I sold my place in ETexas and I offered owner financing. My realtor handled the credit check, helped me with the restrictions, (he cannot sell any timber, gravel, clay, etc. without my permission) Of course I had my lawyer draw up the deed restrictions and payment schedule. My reason was the interest he’s gonna pay if it carries the full 15 years and the fact that in reality, it’s still mine until he pays it off.
                    Sounds like it worked out great for you.
                    Thanks for sharing.

                    Comment


                      #11
                      I have a place for sale too and will not owner finance. My place is high fence, so a lot of the value is in the animals. They could pay me 10% then go sell or kill every animal on property and walk away with a bunch of money. I also have a nice house that they could ruin. If you don't have a high fence, or house on property I would consider it, I have done it on another deal without issue.

                      Comment


                        #12
                        As long as there are no improvements on the property that could be destroyed, your risk should be minimal if any. I had a client several years ago that sold his house in Houston doing owner financing. The first few months the payments arrived like clockwork. After about six months the payments stopped and attempts to reach them by phone resulted in finding out that their phone had been disconnected. The client went to the property and if he had not shown me the pictures, I would not have believed it. The buyers stripped the house down to the studs. They took the carpet, paneling, electrical wiring, all the plumbing, they literally took everything including the kitchen sink.

                        Comment


                          #13
                          Originally posted by AntlerCollector View Post
                          One thing I would worry about is why can't they get their own financing? If they have 10% in cash and decent credit they should be able find a lender. If their credit is horrible then I wouldn't want to finance them anyway. Just my .02


                          Do you have this land posted for sale? What County?


                          When i looked at buying some land this year everyone i called on raw land loans required 20% down.... Maybe he doesnt have 20% for a loan through a lender but has 10%?

                          And i have great credit so that wasnt an issue

                          Comment


                            #14
                            Question

                            If it is owner financed will it show up in a credit check?

                            Maybe they do not want the debt to show on credit report? I really dont know just a thought why someone would want owner fi instead of bank. Owner is usually higher.

                            Comment


                              #15
                              Originally posted by deerwatcher51 View Post
                              As long as there are no improvements on the property that could be destroyed, your risk should be minimal if any. I had a client several years ago that sold his house in Houston doing owner financing. The first few months the payments arrived like clockwork. After about six months the payments stopped and attempts to reach them by phone resulted in finding out that their phone had been disconnected. The client went to the property and if he had not shown me the pictures, I would not have believed it. The buyers stripped the house down to the studs. They took the carpet, paneling, electrical wiring, all the plumbing, they literally took everything including the kitchen sink.
                              That sounds more like insurance fraud to me. Used carpet sinks and toilets are dont go for high dollars.

                              Comment

                              Working...
                              X