New Seller Financed Deals....

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Posted by Michael Morrongiello on August 10, 2008 at 19:34:05:

In Reply to: State of the business in todays economy posted by Shawn Dostie on August 09, 2008 at 12:55:23:

Shawn:
The good news is that many of the so called "pretender lenders" (loan servicing companies who act as if they are lenders) are out of business.

Thus we are in a VERY tight credit market. However that has affected investors in new unproven seller financed notes as well.

While Sunvest still selectively will purchase a new unproven seller financed note which does not have any track record of payments associated with it - we much prefer to see that the deal is CLOSED and at the very least one (1)or more installments get paid FIRST before we take on the purchase of the Seller held Note.

So, yes even in the seller financed industry the deep tentacles of this credit turn down have affected many "paper" investors ability to acquire new unproven seller financed notes.

Clearly exceptions exist. For instance we just agreed to purchase a BRAND new seller financed $60K purchase money 1st lien Mortgage & Note from a property seller who sold the home to a buyer - where the buyer came in with 40% ($40K cash) cash down towards a $100K property purchase price.

Given the large commitment of cash to this property from the buyer we felt OK with that type of new unproven deal.

However the days of buyers coming in with 5% to 10% minimal cash down payments and expecting the property / Note seller to be able to readily convert their seller financed "paper" at the time of the escrow closing are for the most part no longer available.

The focus these days for most paper investors is on CREDIT and EQUITY. Strong credit and a buyers commitment to the property are percieved to be very important.

So, YES structuring a sale with seller financing is STILL wise as it allows the property seller to SELL their inventory and then in a (2) two step process at some point in the near future move through the "paper" to get to CASH.

Best to your success;
Michael Morrongiello
Paper Practioner
www.sunvestinc.com
Author of the following home study courses;

Paper Into Cash - The Convertible Currency - How to Effectively Create Marketable Real Estate Notes
&
The Unity of Real Estate & "Paper" - Advanced techniques for both the acquisition and disposition of properties using Real Estate "paper"



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