how do i get a good deal on a owner finance home to flip an rent out.?

Asked by ginocnt, San Antonio, TX Wed May 22, 2013

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Marco Bolado, , San Antonio, TX
Wed May 22, 2013
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If you buy a deal owner finance you can't flip it to another buyer without wrapping the existing lien holder, which most do not like. You need to read some of the answers below and do a lot of research/studying before anything else.
1 vote
Thanks for the info im young in the game just started buying houses like crazy fix uppers an got a deal on a owner finance rented it out for more an flipped like 4 homes at one time but then since took it easy an did follow up on what i needed to know thanks .
Flag Tue Feb 4, 2014
Jordan Gouger, Agent, Austin, TX
Tue Feb 4, 2014
First of all, don't believe the so-called "fix-and-flip" gurus. Most of them are just snake oil salesmen. You may have much better success with so-called "hard money" or "private money" than with owner-financing. This kind of financing is designed for people that want to flip homes for investment and resell them in 3-6 months. Once the renovations are complete, and you decide to rent it out the existing loan can be refinanced into conventional financing. However, if you decide to flip and sell, be wary of the new Dodd-Frank lending rules. The new lending rules that went into effect last month are designed to specifically prevent unscrupulous flippers from going in and doing a quick job and demanding a high resale price. You will be asked to submit your receipts to the buyer's lender so that they can verify that they work was actually completed.
2 votes
Don Groff, Agent, Austin, TX
Thu May 23, 2013
Honestly owner financing is hardly ever a good deal for the buyer. It's usually done when they owe more on a home than they can sell it for... so usually people who cannot qualify for traditional credit buy those homes for above market value. Usually you would also need to put a good down payment of at least $10,000 that you don't get back if you do not refinance out of the home in a specific period of time.

So what you are looking to do really does not exist in the market because if an owner could sell a home now they don't have to go the owner finance route... now if you go back 1-6 years that was not the case but the number of owner finance options will continue to decrease and the ones that are available do not tend to be a good deal for anybody other than the owner in my opinion. Not always the case but that is the general rule of thumb.

Hope this helps.

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Don Groff | REALTOR® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
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websites: http://www.AustinListed.com | http://www.360LendingGroup.com
Web Reference:  http://www.AustinListed.com
1 vote
Don Tepper, Agent, Burke, VA
Wed May 22, 2013
You're mixing apples, oranges, and pears.

How do you get a good deal on an owner-financed home? Look for sellers willing to do owner financing. For a particularly good deal, look for properties that need some fix-up--where the seller pretty much just wants to get rid of the property for whatever he can get.

As for flipping it--flipping means buying, doing some quick fix-ups, and selling. If you're interested in flipping, don't restrict yourself to owner-financed homes. You're already getting a "favor" from the seller with the owner financing. To find a flip, look not only on the MLS but also at other sources: Wholesalers, for instance. Or make offers on properties that aren't currently listed. If you want to flip, you have to know your numbers--making sure you have enough room to buy, repair and improve, and then sell.

As for renting out a property--that's "buy and hold," not flipping. In this case, your only concern is that the amount you're paying for the mortgage (whether or not it's owner-financed) is substantially less than the amount you're collecting for rent. Again, you have to work the numbers. Some areas of the country are a lot easier to do that in than others. I don't know about San Antonio.

Hope that helps.
1 vote
ginocnt, Home Owner, San Antonio, TX
Tue Feb 4, 2014
Well thank you very much very helpful.
0 votes
Jeremy Gonza…, Agent, Austin, TX
Thu May 23, 2013
Another great resource for you to look into is BiggerPockets.com. It's a great networking site full of investors who share ideas, thoughts, questions, and answers.
0 votes
Dan Balcar, Agent, San Antonio, TX
Wed May 22, 2013
One of the few places you can find that kind of deal is on one of those "How to buy with no money down and get rich" DVDs from late night TV.
Most owner financing is offered at rates well above the market or on homes that are in such poor condition they don't qualify for government backed loans.
I have owner-financed a couple of "rentals" over the years, and they are mostly for people with lousy credit.
0 votes
Bill Eckler, Agent, Venice, FL
Wed May 22, 2013
Many would consider "good deal and owner financing" an oxymoron.

Bill
0 votes
, ,
Wed May 22, 2013
Can't wait to hear the answers on this one, step up guys,
0 votes
Gordon Parker, Agent, Highland, IN
Wed May 22, 2013
Door Knock.

Respectfully,

Gordon Parker
0 votes
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