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Many folks ask us how we got into the business of owner financing, lease purchase options, contract for deeds, or land contracts as they are called. Well, here's the short story.
OwnerFinanceHQ.com was founded because the real estate investors who run the company became specialists out of necessity. You see, as investors who were heavily invested in a large volume of rehab property in 2006, we had two choices. Sell our properties at significant discounts or go after a market segment that couldnt low ball us with rediculous offers. We couldnt have our houses sitting empty and decided a very long time ago that the hassles created in the rental business were not for us.
We decided to go the owner financing route. We learned the hard way the a lease option was just a glorified rental agreement if it was not done properly. From that time on we began the process that we currently utilize with the creation of our first website www.builderleasepurchase.com. We have a full time staff that does nothing but pre-qualify and manage lease purchase/ owner financing clients. Without that, you have a very small percentage of lease purchase transactions that actually get refinanced.
We would buy properties in desirable areas, and market them to buyers needing owner financing, for whatever reason. We would then work with the buyer while they were in the home, to rectify whatever problems they had. As long as the income is there, we can work around everything else.
We learned that for a variety of reasons, there were still very good candidates in the market who could afford a houses, but couldnt get a mortgage right away. Combine that with the fact that so many sellers have been unable to sell their properties, and a new market was created for owner financing purchase contracts. We were approached by a few builders in 2007 in Atlanta to help them market their inventory via our program. We met with their banks and explained the benefits of this option versas a potential builder foreclosure. Since then, we have been selling brand new houses to good people while we work to resolve their specific financial issues. Once they are ready for a traditional mortgage, we help them secure financing and the builder gets to move on to a new property. The bank isn't forced to take back yet another foreclosure which could cost them 20-40% of the original loan amount. It is a win win for everybody.
Today, most of the buyers who contact us are looking for owner financing, lease purchase, or contract for deed options for a variety of reasons. They may include poor credit due to bankruptcy, short sale, or medical bills. Due to new mortgage criteria, business owners and the self employed find it harder to document their income and many banks are starting to require downpayments that are approaching 20% again. Some are denied a mortgage because of time on the job. It has become critical that the industry begin looking at alternative financing methods to solve some of our real estate problems.
Most of our homes we represent are either brand new or recently rennovated. We have a very specific criteria that our sellers must abide by in order to take part in this program. We will not sell a house via owner financing or lease purchase program if there is any chance the builder may not be able to perform down the road. In many cases, we get direct approval from their lender in order to protect the buyer. Our process reduces the owners risk and typically provides an option most banks are excited to accept.
If you are a builder or rehabber, one or more of our executives will be happy to meet direclty with your bank to explain our program and its benefits. We realize many home builders have their backs up against the wall with late interest payments, extended notes, and huge inventories that wont sell. Look at us as your partner. Making the bank feel better about the situation is part of our job! Helping you liquidate your inventory is our priority!