Sell house – keep land

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  • I remember Jack Miller talking about an investor/owner selling a SFR with owner financing, but keeping ownership of the land it’s on. Anyone have any experience or 1st hand knowledge of this ? Comments on pros and cons? Who at state level (Alabama) would I check with ?

    Hi John

    I have heard Jack Miller mention this strategy many times but I have never tried it myself.

    There were two main reasons to do this if I recall.

    1. If the buyer could not afford the house and the land, just sell what they can afford and keep the rest.

    2. in areas where land prices may go up faster than improvement values, it is better to keep the land

    IN some areas, all land is leased for 99 years and never owned by the buyer of the improvements… still, I think in today’s tight credit market if a buyer were going to get institutional financing it would be really hard to find a lender who would make a loan with the land separated unless it had already been structured that way for a long time.

    If you were selling with seller financing it would work easier. Remember, starting in January you need to follow the new Dodd0Frank rules.

    Any one else have thoughts on this?

    That was the jest of it as I remember. If you lease the land and they default on the lease tell them to take their house and go. Is that not a secure lease?

    Don Wede

    Its even harder to move an SFR than a Mobile Home

    If you sold with seller financing you would need to tie the land lease to the house payment somehow, otherwise they could make payments on the land lease but not the house.

    There’s always a way!

    Fancy term but simple idea. It is called cross collateralize. A defult in one is a defult in the other.

    Don Wede


    Check with your local RE attorney. Happens lots in MS rural areas since 16th section lands are leased to fund schools outside incorporated towns. I have steered clear of 16th section properties for obvious reasons. However, would be happy to sell a SFR/MH and keep the land should the situation ever present itself.


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