Can I sell a property with seller financing without having to carry a bill in my company’s name?
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Can I sell a property with seller financing without having to carry a bill in my company’s name?
I am going to be flipping the properties I purchase using seller financing. I would also like to report to all 3 major credit bureaus. After I finance a tenant I would like to have no responsibility in the property, much like a financial institution does when granting loans. Is it possible to report a tenant to a credit bureau on a month-to-month basis for the amount of the financing? Additionally, is it possible to have no responsibility in the property without being a financial institution? Finally, if I have to be a financial institution, how do I go about incorporating one?
Asked on October 9, 2011 under Real Estate Law, Ohio
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If you sell your property subject to a seller carryback, you should get a promissory note stating the amount of interest on the amount financed as well as its due date secured by a first mortgage or trust deed recorded on the property.
Since you have sold the property to the buyer subject to a seller carryback, you will not longer be on title to the property and would have no responsibility concerning it unless you have to foreclose upon it and take back legal title.
You could report the buyer's payment on a monthly basis to a credit reporting agency. Whether the agency reports upon the payments internally depends upon the agency's custom and practice.
In order to become a financial institution is a very complicated process requiring significant assets and statutory approval.
I suggest you consult with a real estate attorney concerning any further questions that you may have.
Good luck.
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