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MikeT/NC

Contract for deed

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I was listening to one of my favorite Gurus today and he was explaining how he uses Contract for deeds in his investing. Very similar to a cooperative L/O. The seller and buyer would sign a CFD instead of a L/O contract and you would collect part of the down payment as your fee to release your option contract.. He didn't say but I am assuming you would have to have a pure option with the seller so as to be a principle in the deal. I can see where it would have some advantages and disadvantages versus CAs.

 

Meanwhile back on the farm. I'm sending out my first 1000 post cards Monday.

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Hi, Mike. Indeed, it is one more tool for getting the deal.

1,000 piece mailing. . .nice. Good luck with that and keep us posted on your results.

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Along with the 1000 post cards I sent out today I also sent 25 letters to people on trulia whose home had been on the market at least 180 days and also had been discounted at least once. I figured they might have begun to squirm a little.

 

I also got a call off of some probate letters I sent out last week. One lady/broker that inherited 10 rentals said she would like to discount and sell to an investor rather than fixing them herself and selling individually. She stays three hours away. I figured this might be a good whole sale flip with an option contract. They are not in a war zone but lower middle class.

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Along with the 1000 post cards I sent out today I also sent 25 letters to people on trulia whose home had been on the market at least 180 days and also had been discounted at least once. I figured they might have begun to squirm a little.
Absolutely. Time is a great motivator. Show them how they can receive a higher price in less time working with you.

 

I also got a call off of some probate letters I sent out last week. One lady/broker that inherited 10 rentals said she would like to discount and sell to an investor rather than fixing them herself and selling individually. She stays three hours away. I figured this might be a good whole sale flip with an option contract. They are not in a war zone but lower middle class.
Good thinking. Excellent opportunity to work a risk free deal with much potential for you.

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Can anyone explain the difference between a l/o and a cfd to me? One guy, a homeowner said in different states it works better to have a cfd. What could I say cuz I don't know the diff.

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Deelight, In a CFD the seller holds the deed until the home is paid off. The buyer makes payments to the seller and when its paid off then the deed is transferred.

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Anyone familiar with a contract for deed? I would like to know more. I think some sellers would be comfortable with this contract.

 

So the buyer pay off the seller every month, does the seller charge an interest for financing? for example, house worth $300k, selling CFD at $350, buyer pays $2000 per month, but $1500 is principle and $500 interest payment.

 

Or

 

house worth $300k, selling at $350k, buyer pays $2000 per month and all goes to principle. no interest is considered.

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Guys, (and gals B) ), there is no shortage of info available on CFDs, and the differences between them and traditional seller financing. Google or Bing the subject, sit back with an adult beverage, and you'll soon be well versed in this matter.

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yeah, mannnny hours later. I was jus lookin for the reader's digest version. But that's ok. I got enough to do without chasing anything else ^_^

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If I may...

 

Lease w/Option to Buy - Occupant/investor is a tenant who has the option to purchase by a certain date.

Lease Purchase - Occupant/investor is a tenant who is obligated to purchase by a certain date.

 

Contract for Deed - Occupant/investor is a buyer but only gets the deed after they pay off their debt to the seller.

Subject to - Occupant/investor is a buyer and gets the deed at closing but the loan remains in the seller's name.

 

Owner Financing - Occupant/investor is a buyer and gets the deed at closing. They make repayments to the former owner instead of an institution (eg. bank)

Bank Financing - Occupant/investor is a buyer and gets the deed at closing. They make repayments to an institution.

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Much like the Loch Ness Monster, Dougie makes a rare appearance, keeping the myth of his mysterious existence alive. . .

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Hi MC,

 

Follow-up to my last post. The seller has a 1.11 acre farm, recent appraisal of $166,000. He's asking $155,000. He will accept an Illinois Land Contract or and Installment Contract. He wants a 10% down of the asking price.

 

Questions:

Do I use the Pure Contract form or the Illinois Land Contract/Installment form?

How do I go about protecting my $$$ interest in the deal? If the Buyer puts 10% down ($15,500) and I desire $5,000. Must the Option Consideration be for $20,000?

Must I have the buyer and seller sign the documents first, or just the seller? I told the seller I will be assigning this contract to the buyer and he's okay with that since he's not paying me.

The seller would like this all complete by Nov.15th.

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Much like the Loch Ness Monster, Dougie makes a rare appearance, keeping the myth of his mysterious existence alive. . .
Loch Doogie. This time I'm resurfacing with partner in crime too. My wife Molly is into REI as well :)

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