Contract for Deed!

[steve55121]

HI!,

I was wondering if anyone knows of any companies that administer contract for deeds? I would like to buy houses... place them into trusts and then do a wrap mortgage and sell it contract for deed. This way I can carry paper and make money on my spread over a series of years.

any suggestions ?

-Steve

[Dan Auito]

Stevoe, my suggestion is to contact Tom Henderson AKA "The Note Professor" Here on our site either by private message or e mail and pose the question. He would surely have some suggestions.

Hello From Tom Henderson, a.k.a THE NOTE PROFESSOR
(He can be found in our members list or the celebrity guests, topic block!)

Others are free to add insight! Dan

[Tom Henderson]

Hello Steve,

There are several companies that offer loan servicing. I would try my local bank first. If they do not have a loan servicing department, I am sure they can direct you to a reputable one. If you have a local company, it often makes things a lot easier. Some will insist on keeping the note, some do not. If possible, try to keep your original debt instrument. If it gets lost, foreclosure becomes difficult.

Depending on the state you live, because contracts for deeds are not notes per se, some loan servicing companies are reluctant to service contracts for deeds because of the legalities associated with it, but others do not care.

You have an excellent strategy selling your properties using wraps. This allows you to not only be more in control by being responsible for the underlying loan, but gives you advantage of enjoying interest on money you have not lent out. This greatly increases your yield. I call it "gift wrapped" because the extra yield you receive for collecting interest on money you have not lent out is truly a gift.


A loan servicing company also gives a payment history should you want to sell your wrap. Yes, you can sell wraps.

Words of caution if the underlying loans have due on sale clauses. Typically, when your payor pays the loan servicing company, they will then send a check to the underlying lender. If your payor is late, your payment to your lender will be late also. Not only will this not look good on your credit, but it gives the lender the excuse needed to call the loan due if they choose. Usually lenders do not start calling loans unless there is reason...like payments being late.

You can work this out with your loan servicing company to maybe put a payment or two in escrow, so they will send out your payment on time, or even a little early. This will keep your lender a happy camper.

You should always check with your legal advisor as to the legal risks associated with using a loan servicing company.

If I can help you, please email.

Hope this helps.

Tom Henderson
H&P Capital Investments LLC
214.575.8292
1.800.481.6588
www.hpnotes.com

[Dan Auito]

Great advice professor! I don't think I'll ever look at gift wrapping the same. I just love that phrase as it rings so true. What a great trigger for future thought! :praise: Great question as well Steve!

[steve55121]

thanks

-Steve