Marketing Buyers – Land Contract Buyers

If you don’t know what a land contract is or a contract for deed or a bond for deed or an installment sales contract, well here is an explanation of how it works.

Land contracts come from the Midwest where Farmers would put some money down on some land, and every Harvest they would make a payment toward ownership of the land. Sometimes land contracts would be 5 years sometimes they would be 10 years sometimes they would be 30 years. But at the end there would be a balloon payment and then that would be paid and the land contract payor would own the property.

I always explain it like it was a car loan and you put some money down and you make your payments and at the end of those payments you own the car. But it’s more like a lease where you put some money down and you make your lease payments and then you have to pay the residual which is a good amount of money if you want to own the car.

You can generally get more money than Market rent if you have a land contract buyer rather than a tenant. You do need to underwrite the buyer and make sure that the ability to repay rules are obeyed. Dodd Frank was put together so that buyers of contract sales like land contracts would not get screwed.

But as a real estate investor I would rather have a land contract buyer than a tenant in the property any day of the week. These people are committed to making that payment for a long. Of time.
Comparing a land contract buyer with a lease with option tenant buyer, you can generally get more money put down from the land contract buyer than the tenant buyer.

The problem does come trying to get out of delinquent land contract buyer. Some states it’s a foreclosure. There is unique law in Ohio that says that if it’s less than 5 years in the property and it’s less than 20% of value all payments including the down payment and the monthly payments together, if all that is under 20% of value, you don’t have to go through a foreclosure, you go through landlord tenant court and evict. That’s a unique law. I do love land contracts. I like them to buy and I liked them to sell.

We have a huge amount of marketing available to find people that want to buy on land contract, just send us a message and we’ll talk about setting up a marketing campaign for you.