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Selling my own home on Land Contract - How much $ down?

Wednesday, October 02, 2002 @ 10:11 PM EDT

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Contributed by: natalienormyle

natalienormyle Properties

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We are somewhat new investors in the Chicago suburban area with one rental soon to be L/O house and the fixer upper that we live in. We have been in the fixer upper for a couple of years and most of the work is done. I want to sell this prop. on a land contract - it should appraise for around $150. maybe slightly less.

I have read that you should get at least 10% down on owner finance deals, is this realistic to expect someone to come up with 15k cash down payment? Should I expect to have a long waiting period before the house sells with this kind of cash down payment or is this high demand terms that typically move fast?

We will refinance before sale on an 2 yr. ARM and pull enough cash out to buy our next house. I have a great mortgage broker that commonly refinances these credit challenged buyers out of land contracts. The rate will be 5% on my new loan - how many points higher than the underlying financing is owner financing usually set at?
Thanks in Advance!


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owner rental sale rate move maybe cash /> i contracts. sell most less. before expect refinances $150. waiting fixer investors live land will demand refinance home /> thanks challenged usually house. loan area deals, /> we have someone than want appraise fast? done. least payment? house this advance! with long mortgage kind much payment couple high these credit years broker financing great prop. underlying period chicago enough sells slightly finance somewhat many realistic been work soon buyers down upper read selling higher should next suburban typically commonly down? points contract pull terms come around

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Re: Selling my own home on Land Contract - How much $ down? (Score: 1)
by joel on Wednesday, October 02, 2002 @ 10:20 PM EDT

It might depend on your area natalie. Do you know what other investors normally charge in your area?? In NC, not a lot of families would be able to come up with 10% down, that is why they are purchasing from you to begin with right??[ No Comments Allowed for Anonymous, please register ]

Re: Selling my own home on Land Contract - How much $ down? (Score: 1)
by JohnLocke on Thursday, October 03, 2002 @ 03:03 PM EDT

Natalie Normyle,

Glad to meet you.

You can get 10% down on a $150K house. This is what you will need to look at however, for ever payment you make on the property it will deduct from your asking down payment, thus not selling the property right away will start coming off your down payment price.

I did a study on how many calls you recieve on various down payments considering what type of property was advertised, SFH, Condo, etc.

On a Single Family home advertised at $4K down there would be about 100 phone calls. $8K down about 25 phone calls. I have found that on a $150K house the ideal down is between $10K-$12K, which is the norm for a fast sale. I said 'norm' if the area is super and the house is also, then $15K down is not unreasonable.

You can easily add 3%-4% on to the existing 5% which will give you a nice monthly cash flow. Remember No-Qual (credit challanged buyers) are interested in the monthly payment, more than the interest rate or price of the property.

John $Cash$ Locke

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