Good morning, everyone! Today, I’m thrilled to introduce Sarah Montes from Texas Pride Lending. For those who don’t know me, I’m Ryan. Let’s dive into the compelling world of seller financing and the role of Real Estate Mortgage Loan Originators (RMLOs).
Understanding Texas Pride Lending
What is Texas Pride Lending?
Sarah explains that Texas Pride Lending works with real estate investors to create seller finance notes. They ensure that investors stay compliant with all relevant regulations, helping structure deals as qualified mortgages (QM). This is crucial for those acting as lenders to avoid legal issues.
Why Compliance Matters
When you have a QM status, you’re more likely to get a better return on your note if you decide to sell it. Qualified mortgages bring peace of mind and added value down the line.
The Role of RMLOs in Seller Financing
Do You Really Need an RMLO?
A common question is whether you need an RMLO for owner financing. Sarah points out that even if you’re doing less than a few transactions a year, it’s wise to use an RMLO. By doing so, you gain the benefit of a qualified mortgage, which is essential if you ever plan to sell the note.
Legal Compliance
If you’re doing three or more transactions in a 12-month period, you are legally required to use an RMLO. Rules established post-2008’s real estate crash are meant to protect both lenders and borrowers, ensuring that the latter can afford their homes.
The Importance of a Good Team
Who’s On Your Side?
Sarah emphasizes the importance of having a good servicing company, like August REI. These companies handle payments, taxes, and other crucial details, offering another layer of protection for investors.
Picking the Right RMLO
Ensure that the RMLO you choose is compliant and thorough. Texas Pride Lending stands out for its quick turnaround—24 to 48 hours—dedicated solely to seller finance transactions. This specialization speeds up the process significantly.
For the Investor
Bringing in Buyers
Investors generally find their buyers and bring in Sarah for pre-qualification. Texas Pride Lending can also help introduce potential buyers if needed, adding flexibility and value to their services.
Handling Multiple Buyers
If an investor has multiple potential buyers, Sarah can pre-qualify all of them, choosing the best candidate. She also keeps an eye out for future potential buyers, enhancing your investment strategy further.
The Bigger Picture
The Appeal of Seller Financing
Seller financing fills a gap in the market, especially for buyers unable to secure traditional loans. It’s a beneficial option for self-employed individuals or those with complicated finances.
Focus Areas
While Texas Pride Lending used to operate nationally, they have now scaled down to focus on Texas due to high demand, particularly in major markets like DFW, Houston, Austin, and San Antonio.
Final Thoughts
Educate Yourself
Sarah advises investors to understand all options—wholesaling, renting, or seller financing—before committing. It’s essential to know the property’s conditions and the potential returns from each strategy.
Cost and Timeframe
The fee for Texas Pride’s services is $850 per property, ensuring you stay compliant and receive a qualified mortgage. Typical turnaround times are 7 to 10 days post-disclosure, allowing for a quick and efficient process.
Takeaway
Texas Pride Lending and their expert RMLO, Sarah Montes, offer invaluable services to real estate investors seeking to navigate the complexities of seller financing. Compliance with regulations and achieving qualified mortgage status are critical for maximizing returns and ensuring legal safety. By partnering with a dedicated team like Texas Pride Lending and leveraging their efficient processes, investors can confidently engage in seller financing, bringing flexibility and opportunity to both themselves and potential buyers.
Educating oneself on various investment strategies and understanding the intricacies of seller financing can significantly enhance investment outcomes. Texas Pride Lending’s commitment to providing timely and compliant solutions makes them an essential ally for any real estate investor in Texas.
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