Posted by Michael Morrongiello on October 01, 2002 at 20:11:44:
In Reply to: Owner Finance and selling the Note posted by Jerrold in Dallas on September 08, 2002 at 02:28:30:
Jerrold:
Marketing a home for sale with Owner financing allows you to use this technique as BOTH a marketing and financing tool to move your unsold inventory (homes,etc.) Fast.I take issue with Jim's statement about Note funders only purchasing 80% LTV seller financed 1st lien Notes and Trust deeds. Our firm (Sunvest) regularly purchases a 95% LTV seller carryback 1st lien Note and Trust deed.
With a prospective buyer putting down at least 5% cash (and preferably more), you can offer to seller finance the resulting balance by carrying back a purchase money 1st lien where there is NO PMI premium to be concerned with, No application fee, No points, No escrows or impound accouts, and NO prepayment penality.
The 1st lien Note can be SOLD often CONCURRENTLY with the sale of the property so that you get your cash out immediately.
Now, when dealing with a 5% down buyer and a 95% LTV 1st lien, the prospective payor credit profile, employment, and credit scores will have to be a little cleaner. Typically a 600 + credit score buyer will do nicely.
Hope this sheds some additional input on how to use seller financing as a wonderful marketing tool to move your properties fast!
To your success;
Michael Morrongiello
www.sunvestinc.com