The due-on-sale clause is not much of an impediment if you don't sell the house for many years, which is what I was talking about---Real estate ownership-at-a-profit requires long-term thinking, always.
Buy a house, live in it for a while, rent it out so the renter is making the payments for you.....then sell years later when you need the money or otherwise see an opportune time to sell. Providing owner financing at that time and obtaining years worth of income stream can yield far more bucks than selling for cash, but again this requires long-term thinking and a long-range plan.
People who buy houses never have the luxury of thinking the house will rise substantially in value....this thinking might be common right now but is dangerous to those who don't have a long-range foreseeable plan, even though history indicates it will happen.
The point is to get the house, get whatever value it can give you out of living in it for a while, then get someone else to make the payments at what might well be negative cash flow, but if you made enough of a down payment or have enough equity, could be positive cash flow...Meanwhile you take whatever tax benefits are available for being an investor/landlord, and someday, in the future, you cash it all out or take the income stream route of owner-financing the sale.
This type of investing does require upfront cash, finesse, knowledge of tax laws, knowing how to pick good properties, willingness to be a landlord... but has worked for many and probably will work for many in the future who are willing to think and act long-term.
You mentioned that owner financing is "limited to sellers to own their home free and clear"----In my opinion, many homes are going to be sold over the next decade or so by retirees or estates who are in that position, and some smart buyers are going to be able to take advantage of this by negotiating financing deals beneficial to both them and the sellers. Several years ago, many mid-level homes in my area were being sold by retirees who owned them free and clear...more of these folks will crop up in the future as their boomer kids begin to sell THEIR homes. |
