Profile cover photo
Profile photo
Seller Finance USA
38 followers -
Stabilize, strenghten, and stimulate the real estate market through seller financing
Stabilize, strenghten, and stimulate the real estate market through seller financing

38 followers
About
Posts

Post has attachment
+The following reinforces what was shared at the Phoenix REIA meetingof December 12th   what are your thoughts?  *Phoenix Market Update from the
Arizona Real Estate Investors Association—AZREIA*
12 9 14  Dave Franecki
At the Arizona Real Estate Investors Association meeting of December 8, 2014, Allan Langston presented his monthly state of the Phoenix Real Estate Market Report. While normally very  bullish on the Phoenix Marketplace, Allan was as he has been since August, 2013 very bearish on the market trends. He was clear to point out investors take advantage of all situations to make money, but with that the market is very unpredictable so caution was the mantra.
There is currently a new home market inventory of 5.3 months compared to the normal average inventory of 6.3 months dating to 1992. New home sales are 8% less than this time last year and expected to drop more by year end. Homes can’t be built without permitting and they are languishing at 61 percent of the normal average or at the 1992 levels.  Amazingly there is one new apartment being built for every new house. Apartments are up and housing is way down.
The resale housing inventory is down and demand is VERY weak. Pending sales this time 2013 were 5000 compared to 4450 units for 2014.
Days on market is a steady 86 days if, if the property sells then. If not the average days on market jumps to 120 days.
This indicator dictates where the market will be for the next few months. Spring will dictate if the Phoenix market will change or go sideways or down.
What the market needs is a change to the stringent financing regs implemented with the Dodd-Frank legislation.  This law has blocked out 4 out of 5 buyers from the market place. Therefore seller carry financing could be the saving grace for our real estate economy.
Add a comment...

We learned so many great facts and ideas from Michael at +Social Secret Agent today! Cant wait to put them to use!!
Add a comment...

What does everyone think about these 7 common mistakes?

Avoid These Seven Seller Financing Pitfalls at All Costs!!!
Expect a big pay off on your unpaid principle balance?  even though. Unrealistic expectations from the lender will occur when the paper was poorly written. Would you rather have $97,000 to sell your $100,000 note for only $80,000 or less? The difference in usually comes down to the following. Here’s the biggest mistakes note sellers make and how to avoid flushing money down the drain.
 Mistake #1- Disregard of the Dodd-Frank CFPB Guidelines 
The Dodd-Frank legislation was passed on January 10, 2014. It imposes some very stringent guidelines on private lending. Not following those guidelines will leave the original lender and the subsequent note buyer with huge liabilities. This includes balloons, interest rates
 The Seller Financing Solution?
Engage the services of a Loan Originator to create a compliant file which will be the very same documentation required by a traditional lender. Equal to Fannie Mae 1003 Loan Application which will include the 8 items to make a compliant file:
• Income and Assets  
• Employment Status  
• Debt  to Income Ratio 
• Credit history*** 
• Monthly Mortgage/Rent 
• Monthly Mortgage Related Obligations 
• Monthly Debt Payments  
• Other Monthly Debt Obligations
The buyer can and will pay the required fee which could be as high as $1500.
                        * The payer’s credit report lets you know how timely they have paid bills in the past. This is a good indicator of how they will pay on a seller-financed note. It also has a huge impact on how much an investor is willing to offer, should the seller ever decide to sell the note payments. Sadly, many sellers never check credit when offering owner financing. Have the buyer fill out a simple one page application that grants permission to pull their credit upfront or ask the buyer to pull their own credit and provide the report. Whenever possible, avoid accepting owner financing from any buyer who is not current with timely payments in the prior 24 months. Blemishes or job situations happen, on going negligence is systemic. 
                          Good Documentation = Good Loan = Higher Profit

 Mistake #2 – Charging a Low Interest Rate
Money today is worth more than money tomorrow. A simple look at escalating food and gas costs will show a dollar today won’t buy as much next year or the year after! This concept, known as the time value of money, plays a large role in investor note pricing.
All factors being equal, an investor will pay more for a higher interest rate note. We’ve seen sellers charge 5% or less on notes. Imagine the discount when an investor wants a 10% yield!
 The Seller Financing Solution?
Charge at least two to four percent above the standard bank loan rate  for a similar loan transaction. Be sure to take into consideration the credit, property type, and down payment, which may justify further increases in the interest rate.
 Mistake #3 – Low or No Down Payment
The down payment determines how much equity the buyer has in the transaction. The greater the equity, the less likely a buyer will default. There is a reason banks require mortgage insurance whenever a buyer puts down less than 20%! In desperation, some sellers will even accept a zero down payment. Unfortunately, these buyers have even less at stake than a renter. A renter at least has a security deposit along with the first and last months rent!
 The Seller Financing Solution?
Require a down payment of at least 15% to 20% at closing. Consider creating 2 notes a 60% first and a 20% second to get a reasonable loan to value.
 Mistake #4 – Not using a Loan Servicing Company
Sellers tried to save money and collect the payments them self vs outsourcing thus saving on e time set up fee of up to $200 and $18 to $15 /monthly which can be paid by the buyer. This lack of payment validation by a 3rd party servicer will give cause for discounting the note value.
 The Seller Financing Solution?
Engage the services of a loan servicing company when the note is originated and have the buyer pay the set up fees and the monthly servicing fees.
Mistake #5 – Requiring a Mortgage Balloon Payment
Ballooning 2nd mtg, with no payments expecting a full payout  tries to be a nice guy, with no money down from the buyer, thus creating a 2nd, balloon only to make it easy on the buyer, but creates poorly written paper
 Mistake #6 – No Tax and Insurance Escrows
Not requiring the escrowing for tax and insurance proration and  leaving  it up to the buyer to pay as when and if………
 The Seller Financing Solution?
Require that the borrowers payments include escrowing for taxes and insurance included with payable to the servicer with each monthly payment just as it would be done in a traditional transaction.
 Mistake #7 – Lender as an Additional Insured
Not added as an additional insured  usually an oversight, but can leave a lender up a creek without a paddle.
 The Seller Financing Solution?
Include / require that the lender be listed an additional insured in the closing documents just as it would be done in a traditional transaction.
A variation of any of above mistakes will result in heavy discounting of the existing note, maybe as high as 50%.
 The Seller Financing Solution?
Sell a(Partial) stream of payments and you as the lender keep the risk. Hold the back end of the note, sell the front 60 payments to free up cash and continue that process.
Other items come into play when valuing a seller financed note ranging from property type, to seasoning terms,  to 1st or second position notes.
The lesson, it is best to consult with a note professional before creating the note. Either pay them for the expertise or give them an option to buy the note in the future.
Just remember that when the buyer receives a break, it’s coming out of your pocket as the seller!  #realestate   #sellerfinance   #ownerfinance   #ownercarry    #sellerfinancing  #PHXsellercarry  #sellerfinancingPHX  #AZsellerfinancing   #sellerfinancingAZ

Post has attachment
Add a comment...

Post has attachment
Safe Passive Investing
Safe Passive Investing
safepassiveinvesting.com
Add a comment...

Post has attachment

Post has attachment
Avoid These Seven Seller Financing Pitfalls at All Costs!!!
Expect a big pay off on your unpaid principle balance?  even though. Unrealistic expectations from the lender will occur when the paper was poorly written. Would you rather have $97,000 to sell your $100,000 note for only $80,000 or less? The difference in usually comes down to the following. Here’s the biggest mistakes note sellers make and how to avoid flushing money down the drain.
 Mistake #1- Disregard of the Dodd-Frank CFPB Guidelines 
The Dodd-Frank legislation was passed on January 10, 2014. It imposes some very stringent guidelines on private lending. Not following those guidelines will leave the original lender and the subsequent note buyer with huge liabilities. This includes balloons, interest rates
 The Seller Financing Solution?
Engage the services of a Loan Originator to create a compliant file which will be the very same documentation required by a traditional lender. Equal to Fannie Mae 1003 Loan Application which will include the 8 items to make a compliant file:
• Income and Assets  
• Employment Status  
• Debt  to Income Ratio 
• Credit history*** 
• Monthly Mortgage/Rent 
• Monthly Mortgage Related Obligations 
• Monthly Debt Payments  
• Other Monthly Debt Obligations
The buyer can and will pay the required fee which could be as high as $1500.
                        * The payer’s credit report lets you know how timely they have paid bills in the past. This is a good indicator of how they will pay on a seller-financed note. It also has a huge impact on how much an investor is willing to offer, should the seller ever decide to sell the note payments. Sadly, many sellers never check credit when offering owner financing. Have the buyer fill out a simple one page application that grants permission to pull their credit upfront or ask the buyer to pull their own credit and provide the report. Whenever possible, avoid accepting owner financing from any buyer who is not current with timely payments in the prior 24 months. Blemishes or job situations happen, on going negligence is systemic. 
                          Good Documentation = Good Loan = Higher Profit

 Mistake #2 – Charging a Low Interest Rate
Money today is worth more than money tomorrow. A simple look at escalating food and gas costs will show a dollar today won’t buy as much next year or the year after! This concept, known as the time value of money, plays a large role in investor note pricing.
All factors being equal, an investor will pay more for a higher interest rate note. We’ve seen sellers charge 5% or less on notes. Imagine the discount when an investor wants a 10% yield!
 The Seller Financing Solution?
Charge at least two to four percent above the standard bank loan rate  for a similar loan transaction. Be sure to take into consideration the credit, property type, and down payment, which may justify further increases in the interest rate.
 Mistake #3 – Low or No Down Payment
The down payment determines how much equity the buyer has in the transaction. The greater the equity, the less likely a buyer will default. There is a reason banks require mortgage insurance whenever a buyer puts down less than 20%! In desperation, some sellers will even accept a zero down payment. Unfortunately, these buyers have even less at stake than a renter. A renter at least has a security deposit along with the first and last months rent!
 The Seller Financing Solution?
Require a down payment of at least 15% to 20% at closing. Consider creating 2 notes a 60% first and a 20% second to get a reasonable loan to value.
 Mistake #4 – Not using a Loan Servicing Company
Sellers tried to save money and collect the payments them self vs outsourcing thus saving on e time set up fee of up to $200 and $18 to $15 /monthly which can be paid by the buyer. This lack of payment validation by a 3rd party servicer will give cause for discounting the note value.
 The Seller Financing Solution?
Engage the services of a loan servicing company when the note is originated and have the buyer pay the set up fees and the monthly servicing fees.
Mistake #5 – Requiring a Mortgage Balloon Payment
Ballooning 2nd mtg, with no payments expecting a full payout  tries to be a nice guy, with no money down from the buyer, thus creating a 2nd, balloon only to make it easy on the buyer, but creates poorly written paper
 Mistake #6 – No Tax and Insurance Escrows
Not requiring the escrowing for tax and insurance proration and  leaving  it up to the buyer to pay as when and if………
 The Seller Financing Solution?
Require that the borrowers payments include escrowing for taxes and insurance included with payable to the servicer with each monthly payment just as it would be done in a traditional transaction.
 Mistake #7 – Lender as an Additional Insured
Not added as an additional insured  usually an oversight, but can leave a lender up a creek without a paddle.
 The Seller Financing Solution?
Include / require that the lender be listed an additional insured in the closing documents just as it would be done in a traditional transaction.
A variation of any of above mistakes will result in heavy discounting of the existing note, maybe as high as 50%.
 The Seller Financing Solution?
Sell a(Partial) stream of payments and you as the lender keep the risk. Hold the back end of the note, sell the front 60 payments to free up cash and continue that process.
Other items come into play when valuing a seller financed note ranging from property type, to seasoning terms,  to 1st or second position notes.
The lesson, it is best to consult with a note professional before creating the note. Either pay them for the expertise or give them an option to buy the note in the future.
Just remember that when the buyer receives a break, it’s coming out of your pocket as the seller!  #realestate   #sellerfinance   #ownerfinance   #ownercarry    #sellerfinancing  #PHXsellercarry  #sellerfinancingPHX  #AZsellerfinancing   #sellerfinancingAZ
Photo
Add a comment...

Post has attachment
Phoenix Market Update from the
Arizona Real Estate Investors Association—AZREIA
12 9 14  Dave Franecki
At the Arizona Real Estate Investors Association meeting of December 8, 2014, Allan Langston presented his monthly state of the Phoenix Real Estate Market Report. While normally very  bullish on the Phoenix Marketplace, Allan was as he has been since August, 2013 very bearish on the market trends. He was clear to point out investors take advantage of all situations to make money, but with that the market is very unpredictable so caution was the mantra.
There is currently a new home market inventory of 5.3 months compared to the normal average inventory of 6.3 months dating to 1992. New home sales are 8% less than this time last year and expected to drop more by year end. Homes can’t be built without permitting and they are languishing at 61 percent of the normal average or at the 1992 levels.  Amazingly there is one new apartment being built for every new house. Apartments are up and housing is way down.
The resale housing inventory is down and demand is VERY weak. Pending sales this time 2013 were 5000 compared to 4450 units for 2014.
Days on market is a steady 86 days if, if the property sells then. If not the average days on market jumps to 120 days.
This indicator dictates where the market will be for the next few months. Spring will dictate if the Phoenix market will change or go sideways or down.
What the market needs is a change to the stringent financing regs implemented with the Dodd-Frank legislation.  This law has blocked out 4 out of 5 buyers from the market place. Therefore seller carry financing could be the saving grace for our real estate economy.
Photo
Add a comment...

Post has attachment
Safe Passive Investing
Safe Passive Investing
safepassiveinvesting.com
Add a comment...

Post has attachment
Photo
Add a comment...
Wait while more posts are being loaded