TamozParticipant@tambo2202Join Date: 2009Post Count: 18
I have found a property that is looking like I could purchase with vendor finance. I have never bought with vendor finance before and am not quite sure how it works and want to walk into the meeting with the vendor looking like I know what I'm talking about!
The property I am looking at has a huge block with a house on it already. The vendor has already done a lot of a subdvision of the a one lot into 3. The plan is to sell off the original house, build 2 townhouses and sell them off.
Would love some advice!
Tambo2202Paul DobsonParticipant@pauldobsonJoin Date: 2003Post Count: 1,196
I'd suggest your first step is to become familiar with the two most popular vendor finance techniques, i.e. Rent To Own (that is a Lease with and Option) at https://www.propertyinvesting.com/strategies/lease-options and Instalment Contract at https://www.propertyinvesting.com/strategies/wraps
Another couple of good spots to get more information on vendor finance are:
Cheers, PaulRPIParticipant@rpiJoin Date: 2012Post Count: 308RPIParticipant@rpiJoin Date: 2012Post Count: 308
"lawyers are not supposed to advise on how to negotiate a commercial deal"
If you are dealing with a general practitioner then yes that can be true, but negotiation is a huge part of a commercial lawyer's practice. We negotiate and put together deals constantly.I Buy Houses FastMember@i-buy-houses-fastJoin Date: 2009Post Count: 7RPI wrote:Just see a lawyer who knows their stuff on vendor financing and they will give you a bit of a quick education while preparing your documents.
Lawyers are Lawyers….. Solicitors Solicit. This is their core business, teaching you how to negotiate with vendors is not, if it were, they would probably not be a Solicitor. I would suggest to you to go and work out what kind of deal you can do with the vendor, document it on a HOA (Heads of Agreement doc), then take it to get the Lawyer to do what he does best and Solicit the documents with the terms, and make it legal. Lawyers are not supposed to advise on how to negotiate a commercial deal, they can only advise the legal ways of doing it ie types of deeds to use for different types of deals. However good Property and Real estate lawyer can save you a lot of time. An eg of Vendor Finance ie Instalment Contract, Lease option or deposit finance (2nd Mortgage) would be the Purchase price of the house might be $400,000, if you can get the whole lot financed by a Lease Option or an instalment contract or if the vendor wants to just finance the deposit, you would get a first mortgage with a bank of $320,000 and a second "Irrevocable" mortgages (including cash deposit) over the remainder, so you don't lose your benefit from the deal. you can talk to brokers about financing, accountants for tax issues, and lawyers to make your deals legal and me for experiences. A really cool way of saving money in the short term, is at negotiation, ie the purchase price (that is getting borrowed), in lieu of them paying your stamp duty once the vendor finance period ends (options executed and last installment made). make the Vendor finance period long enough for the value of the home to go up in value or get the house or building renovated amoungst other startegies that improve values. I say good luck……….. go get em
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