Real Estate Investing – Working With Owner Financing
As a real estate investor, it’s important for you to make sure there are certain clauses included in your purchase contract. If your purchase involves some type of owner financing, a buyer should make sure to look for the following clauses:
-The loan should not have a due-on-sale clause, that way you can resell the property to another investor on owner-carry terms.
-The loan should be made as a nonrecourse, which means that if the buyer defaults on the loan, the seller cannot seek judgment against him or her. Typical clauses read as follows: Seller’s sole recourse in case of buyer default shall be against the property, and there shall be no personal recourse against the borrower. One good strategy to reduce your liability is to have a corporation, such as an LLC or corporation sign for the loan.
If you’re searching for Orange County real estate, try contacting these local Tustin realtors for assistance.
