OfflineContract for Deed
I was talking with a client today who is controlling a property by using a contract for deed. These are referred to in some areas as a land contract. The owner was in default on their mortgage and had moved away. The owner was willing to sell the property on a contract for deed for the amount owed on the first mortgage. The buyer began making the monthly payments and had leased the property after doing some repair to the property. He had nice monthly cash flow after making the contract payment to the seller’s lender.
The issue came up when the lender contacted the owner/seller about the escrow account being short and demanding the owner pay additional funds. The buyer has no access to the information directly from the lender and is trying to get the owner to work with him. He wished he had gotten a release of information signed by the seller when the original contract was signed. If he had done that he could get info about the loan balance and escrow account without having to go through the seller. It is good to learn from another’s mistake. Always get all the documentation you think you will ever need in the initial agreement.
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Mmmm.. good info/heads-up. Thank you, coach. Sometimes we "don't know what we don't know". Good to learn from someone else's experience.
Also a good idea to run ideas/deals past someone else before jumping in. Often two heads are better than one (another good reason to use Dean's "REI buddy system").
Rina
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you read and consume everything you can before you start doing deals. I am seeing way too many newbies talking about how they're 1/2 way into Dean's book and yet they're trying to make offers and have all these questions. The methods are simple, but if you don't have all the key information, you're going to make BIG MISTAKES that can cost you a lot of money!
KimmyJ
Press on...
Thanks for providing the information and the heads up for us to make sure e consider covering all bases with a contract for deed. It is always good to be as thorough as possible and it helps to learn from other's past experiences. Once you learn from somethign you or someone else has done, it gives you more knowledge for that next deal. Thanks again for sharing this information. Believe and Achieve!
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Add to investing notes notebook: Remember to have all necessary paperwork signed between parties (Seller and Buyer), even if its not needed can always been shredded afterwards. Thanks for sharing coach.
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the Merciful.
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