The Good, The Bad, and The Ugly About Contract Sales!
This is your opportunity to learn how a typical real estate investing in underserved communities does social good, by generating multiple revenue streams for investors. TruPodcast series host and investor Ryan DeMent candidly shares his personal experiences and current industry insight that you won't find elsewhere. Let's get right to it. Ryan DeMent here from TruVest.
Hope you're having a great day. Today's topic owner financing contracts. I have to say I'm fired up because I get anywhere between five to 10 calls a week on contracts and guess what? They're worthless. And the reason why is because they're not recorded. They don't give you any type of home ownership. If that contract that's put in writing and it's not recorded with your county assessors office and you become the actual owner of the property, you're getting no benefits. And the other piece of it is probably 90% of the contracts that are recorded or put together don't even get reported to your credit.
So that balloon came that you have 12 to 24 months down the road. Guess what? You have to go get a real mortgage from a bank that potentially is not going to actually finance you because your credit is not good. So why do you want to do a contract? Good question. I don't have an answer, but I can tell you this. If a contract is done right, it should benefit you. It should one list you as the owner. Two, it should be serviced by a mortgage entity to where you send your payments to three, it's reported to the credit bureaus. So you get positive and negative tradelines for your payment history and the fourth, you should be able to write off the mortgage interest on that property when you're making those payments annually.
