Newbie With a question on financing
Question: I have been researching different types of funding to see what is available. I don’t qualify for a conventional loan because of a bankruptcy 3 years ago. What I am trying to do is finance a house in the 160-170k range in Seattle. My current rent is $1050.00 per month + utilities and has been for 4+ years. What I need to know is does anybody know where I can look to find somebody willing to make some money by buying a house and selling it back to me on an owner contract basis? Is this very common? I have had several offers to lease purchase etc. but what I really want is to own outright and get the tax benefits, equity, and appreciation. I have helped remodel several houses and did construction when I was younger so a fixer where I could build sweat equity would be what I would be looking for. Please no replies from mortgage companies, I have tried 3-4 that swear they could get me funded with 5% wait no 10% what I really meant was 25% down.
Answer: Talk to a local real estate agent… Many investor-owned houses are willing to allow you to assume their mortgage or provide seller financing. However, these houses are far rarer, and you will most likely have far fewer options to decide from. This might be really difficult to find in areas w/ single family homes. However in areas with lots of duplexes, you should be able to find some. You may also want to target people who have owned their homes for awhile and seen significant appreciation in their values- These people will benefit alot more by acting as ‘the bank’ then someone who just bought their home a few years ago (for example, a couple owned their house for 15 years… bought it for 50k, now its worth 125k… by arranging financing through them, they stand to earn 7% or whatever interest on 75k, in addition to getting the principal paid back-and they will also get the interest from the principal they have paid off.) for someone in good financial shape who doesnt need the cash from the sale of their home, that is very attractive, considering the state of the stock market- the interest paid at 7% in the first year is around $5000. And if you stop paying, they essentially got to be landlords with zero liability for the period you were in good standing since they get the house back. So target older couples, make the same case I just made to them, and hope for the best.
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