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Contract for Deed or interest in a Land Trust or LLC?
Any advice given, would be very appreciated since I’ll be structuring the deal today with my buyer.
“I” [my LLC] own a completely renovated $275,000 property in Live Oak, FL. The buyer is approved for a loan but would rather do a short-term owner finance [1-3 years] because last year he tried to buy a house but he couldn’t get flood insurance. This may be an even greater concern since Hurricane Idalia did a lot of damage in my city and insurance companies are pulling out.
1] Buyer has $40,000 down and will have an additional $15,000 in 60 days.
2] I have a current insurance claim on the house because of some minor hurricane damages [floor, siding, fence] which may create an issue per my insurance agent. I hired a public adjuster who found WAY more damages than the insurance adjuster. This is dragging it on a little longer. BTW, the public adjuster has already gotten me an extra $7,000. TIP: always hire a good public adjuster as the insurance adjusters will try to give you the least amount of money.
3] If the insurance issue is not a problem,
I think my house may not appraise for $275,000 due to falling housing values. This makes an owner-finance type deal more attractive to me. The buyer can get into the house and refi at $220,000 in a year or so which may resolve the appraisal and insurance issues.4] No agents are involved.
5] My PAID OFF house is in an LLC.
6] To avoid any insurance issues [claim & new coverage] and appraisal issues, owner-financing and a bank loan will not work.
7] My other options that would keep my current insurance in place and avoid appraisal issues, would be a contract for deed, or to sell him interest in my LLC or a land trust.
Am I missing anything? If I give him any interest in my LLC or land trust that I create to hold my LLC, I think it may get complicated if he defaults in the future.
Any advice?
Jim Beebe
678-687-1391
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