Agent

Seller financing’s dark side

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DEAR BERNICE: I hope you might be able to help (or at least point me in the right direction). I am in communication with an investor who is liquidating seven single-family residences. We were about to use seller financing until one of his friends told us how he: 1) sold his property "subject to"; 2) the bank exercised the "due on sale" clause; and 3) called the note due. Long story short, I would like to buy and hold these properties. They have already been rehabbed; they cash-flow well; and they have Section 8 tenants. I need to find approximately $500,000 of long-term financing. --David C. DEAR DAVID: This is an interesting scenario because it points out the challenges sellers/buyers can encounter when they are either unfamiliar with the terms of their loan or try to circumvent those terms. Many years ago, a seller could legally sell her property "subject to" the existing note. This meant that the seller would not have to pay off the loan e...