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I have been talking to an owner who has a couple of duplexes that are rented and cash flowing. He has offered to sell them to me creatively by doing a land contract. I know seller financing is good, but i didn’t know if you would recommend land contract. Since the title does not transfer over tell it is fully paid off. I’m just wondering what your opinion is.
To me this would be the least favored way to buy with owner held financing. The main reason I say this that most often the language is all on the side of the seller of the property. If you draw up the paperwork you could make so it is pro buyer. Of course this is just one aspect of the deal “the paper work ” to purchase. I assume everything else has been checked out to see if it is a good deal.
Don Wede
Hi Bubolz,
Welcome to CFD. The contract for deed could be OK, but read AND understand the terms. A master lease with option to buy, that you provide, could put you in a better position to avoid any liability situation that might arise. A contract for deed could bind you for punitive damages if you don’t follow through. How is title held? Personal or
Entity? Would the owner be agreeable to a Land Trust and you buy the Beneficial Interest?MAC
Everything has been checked out and it is a good deal when purchased with terms. It is held in someones personal name. I have not asked the owner if they would be agreeable to a land trust, because I do not know much about setting up a land trust. However, I hear they are the best things to hold property in.
I was thinking. If i could reword the state of Wisconsin land contract, it might not be a bad idea. What do you think?
Need more info to determine if it is a good deal or not.
What are the numbers?
Is there an underlying loan?
What is he selling them for?
What are the payments?
Does it include taxes and insurance?
What are the properties really worth today?
What are they rented for now or recently? What’s the spread between your in and out payment?
Could the rents be higher?
What are the terms of the land contract?
Is there a balloon? When?
What is the interest rate? is it fixed?
After a certain # of on time payments, will he/she convert to a DEED?
Is there deferred maintenance? What?
How old is the roof?
How old is the HVAC system?
Age of homes?There is a lot more that goes in to determining if you are buying the right house right.
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