I need advice on a property I own in TX. I am in CA and have a realtor handling the sale with my contract due to expire soon. The property was rehabbed but still has some foundation issues. I doubt the property will qualify for a FHA loan. I am willing to owner finance for 3-5 years. Would like to take my money out of the property with a equity line or cash out re-fi. I have no existing loan on the home. Can I transfer deed without recording to avoid due on sale clause??
I would like to sell it “as is” to eliminate my liability with the existing problems. Any suggestions about selling by owner? I would need to hire someone to show it as I am in CA. I don’t think my realtor is very motivated as the price I am asking is in the $40-50K range. I bought it with renting in mind but with the foundation problems I don’t want to take on the liability. Any ideas out there??

"I would like to sell it “as is” to eliminate my liability with the existing problems"

You are MISUNDERSTANDING (AS-IS)!

As is means you are not going to fix or make repairs to the property and you do not warrant the conditions. You STILL have to report all known adverse material facts (which a bad foundation is) before the sale to the buyer. If you do not disclose they can still sue you later for non-dislosure and take you to the cleaners.I hope this property is held by a corporation to limit your liability.


"Can I transfer deed without recording to avoid due on sale clause??"

What are you talking about??? You just said you own the property outright. The deed says who owns title,due on sale is a condition placed by lenders when you have a loan on the home.

Lenders rarely call the loan due with that clause as long as you are paying the mortgage and they are getting there interest they could care less.I don't see you being able to refinance as a lender will not do a refinance with a property that has foundation issues.

How much will it cost you to fix the foundation? What has been the potential buyer feedback so far on your listing?

If you owner finance you do not own the home anymore the buyer does and title is signe dover to them. If they don't pay you can foreclose and take the property back because you are the lienholder on the property.

There are multiple option you could do with such a property but I would have to see it and in Texas that's not going to happen.How much land is it sitting on?? Maybe the value is in doing something different with the land.

If you ever want to do business in Ga let me know.No legal advice.

On refinance lost won't let you go above 75%LTV for market value in current condition.

I don't believe I am misunderstanding "As Is", I fully intend to disclose the problems but as you explained I do not wish to warranty or fix the current condition of the property. Regarding the due on sale question, I want to take a loan against the property if I am going to owner finance to recoup my investment. Whether or not a bank will finance it remains to be seen. Thank you for your feedback, you have given me some things to think about. I really appreciate it.

A bank will not finance with condition issues. If they had to foreclose they would have a lemon.Also you sign docs now that you live in the home when they fund the loan. Used to buyers would lie on the purchase or refinance and claim to the lender they would occupy the home to get the best interest rate.This is a federal crime now and people will be prosecuted to the fullest extent of the law.

The reason is lenders will asses a higher interest rate loaning out on an investor owned home because it's easier to walk away and there is more of a default rate as it's not your primary residence.

Sounds like you want to refinance and suck out most of the value and then get the rest in the form of a downpayment from the potential buyer. You are wanting to have your cake and eat it to.

Alot of buyers would NEVER agree to that scenario. The main reason is there is no proof you are taking the rent and paying your mortgage every month. These situations are rampant where they don't pay the mortgage and the investor takes the money and runs meanwhile the tenant gets a nice foreclosure letter in the mail from the bank who thinks the investor lives there. This is happening by the thousands across the nation. I have tenants purchasing a house in this very situation right now.

How much would it cost to fix the foundation and what would the market after repair value be?? How much do you have into the property?

Why couldn't you hold a balloon note with a big downpayment from the buyer for a year and then get the buyer to refinance and cash you out??

A have a seller in a pickle right now as well.He bought a house through a tax auction and spent a good chunk of change getting good title. Trying to sell his property in GA and he lives in Florida. He wanted 79k but it was overpriced and needed major work. I offered 55k but wanted him to hold a note for a year with a good down payment and a below average interest rate and told him I would cash him out then. His property has been on the market for 6 months and has an arv value of about 120 to 125k.

It's not that I don't have the cash I just wanted it allocated to other investments. He suggested a HML and you know where I told him to stick that option. They want excessive points,very high interest rate,and it would erase a big chunk of the profit I was going to make on rehab. Needless to say his property expired and it is sitting there rotting.

I guess he is waiting for a magic fairy to appear and solve his problems.It would have been a great option for him as if I did all that work and didn't make the payment he could foreclose and I just increased the value of his property enormously,made it easier to sell,and he didn't have to worry about city code voilations anymore.

I hope you are able to move your property.

Its a risky style of investing.You should have to trust with your deals.