How is this still possible, with banks so afraid to lend money today?
Sometimes you can find a New Home Development where the builder ran out of time before the market closed in on him.
And then the bank swoops in and takes over the development. But the bank has to finish the development before it can sell anything. Usually, the houses are not quite finished. Maybe they need carpet and sinks. Or sometimes just landscaping and a doors. But nevertheless, whatever needs to be finalized, the bank, now owner, will finish and sell on the open market.
Most banks want to clear their books. Take the write down and move on. But some banks will think a development is worth holding on to. Perhaps, today, it is worth less than they lent on it. But in the near future, they predict, the values will come back up. Instead of holding the real property and being a landlord, which banks are not in the business of doing, they will simply sell it and lend on it again.
In other words, they are the owner free and clear, and will owner finance. If they intend to keep the loan, they do not have to fear what guidelines Wall Street will require, if they were to sell the note as a MBS or mortgage backed security. So if they want the risk of low down or no down, they can do it.
As lending requirements have tightened, owner financing will become the attractive alternative measure to the mainstream lending.
Here's one example:
On a quiet street in Atlanta Metro, Georgia.
These are big 2000+ square feet, 5 bedroom, 3 bath houses.
Complete move in ready, blinds, fridge, landscaping.
The market rent is $1200 per month.
2 Homes just like this are rented for $1200 in the neighborhood.
The rest are known to be owner occupied.
The Mortgage payment will be $948 for the next 3 years.
After taxes and insurance, and a recommended property manager fee, the cash flow is projected to be neutral.
Here's the deal.
100% finance at 6.5% interest only, 3 year fix.
These are appraised for $195,000 and were listed for well above $200k
call Steve Roesch at NorthPoint for more details, 503-318-6351 or firstname.lastname@example.org