?Land-ing? A Good Mortgage Note [mortgage-solutions.blogspot.com]
John Herdman bought the council house in which he was born during Ireland's property boom when credit was free flowing and 100 per cent mortgages were handed out like sweets by banks. But when the economic crash came in 2008, and he and his wife. Irish mortgage crisis imperils recovery
Author: David Nethercott talks about the impending housing crisis and about his book Subprime crisis and Mortgage Stress at www.elifeofjoy.com Why are 900000 homeowners in Australia expected to be in severe mortgage stress by September 2008? Are you ready to lose your property portfolio and have to start again? Why are so many Americans just handing their home's keys back to the banks and walking out? Can WE avoid this in Australia, UK, India & Europe generally? How can we survive? What action do we take? www.elifeofjoy.com
mortgage-solutions.blogspot.com Home & Property Owners : Subprime Crisis & Mortgage Stress
A gentleman called me a few days ago wanting to sell his mortgage on a small parcel of land located in a remote area, far from any population centers. The land had access to well water but no other improvements. He had purchased the property last summer for $ 60K and had recently sold it for $ 110K. Naturally, he wanted us to pay him the full note balance.
With this real estate note, where do we even start? It has so many challenges and red flags that no investor would even consider buying the full note. The isolation of the property and the fact that he wanted to flip what was almost certainly an overvalued note limits most note buyers to either buy a tiny piece of the note or, more likely, pass on the real estate note altogether.
Right away, I knew that we would pay less for this mortgage note when he told me that it was collateralized by land.
Real estate notes on land without several improvements are even harder to sell because of the added risk. We consider improvements to include power, water, sewer or septic, paved roads going to the property, etc. These types of improvements all add value to the property and make it more likely that it will someday be built upon.
If you’re thinking about selling a parcel of land, recognize that a buyer will probably not be able to get a bank loan. Unless they can pay all cash, you will probably need to carry a note (offer owner financing). To decrease the risk of the note and to maximize the amount that you’ll receive if you later sell it, you’ll want to structure the note correctly. Here are a few ideas:
1.Get as big of a down payment as you can. At a minimum, get 25% down, and aim for 30-50%.
2.Sell to a buyer who has excellent credit, and who has the finances and willingness to cherish and improve the property.
3.Be certain that the sales price is close to the actual value, as determined by an appraiser.
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