Wholesaling Seller-Financed Deals in Colorado

The short answer

Can you wholesale a seller-financed deal in Colorado?

Yes. A contract carrying owner-financing terms can be assigned as long as your role and the terms are disclosed in writing. Let an attorney or title company draw up the note and security papers.

Here the seller plays lender: the buyer hands over a promissory note secured by a deed of trust and pays in installments across the years. Whatever price, down payment, interest rate and term your contract fixes is the package your end buyer inherits. Our seller financing guide and contract guide show how the paperwork is laid out.

Because Colorado uses public trustees, security usually takes the form of a deed of trust, and a missed-payment default runs through that office instead of a courtroom. Owner-occupant buyers may bring lending rules into play; we did not verify the specifics, so have an attorney review current law. Typical payoff designs appear in our balloon payment guide.

The opportunity

Why seller-financed deals work in Lakewood

Older, mid-priced homes and long-time owners define much of Lakewood. A retiree staring at a big tax bill from a cash sale may like the idea of income spread over several years, while self-employed buyers turned down by banks will often pay a premium for friendly terms. Put a plain payment schedule in front of the seller so the monthly income is easy to picture. Installment sale basics explain the concept, and the seller should check the tax side with an adviser.

Lead sources

Where to find seller-financed leads in Colorado

• Long-term owners. Someone who bought decades back frequently owes nothing. Confirm through owner lookup.
• Tired landlords. Landlords may prefer note income to managing tenants. See tenant-occupied property.
• Land sellers. Rural parcels often sell with owner terms. See wholesaling land.
• FSBO listings. Some owners say they will carry. Try finding motivated sellers.
• Expired listings. A seller who could not sell at the price may now welcome terms.

Your exit

Who buys seller-financed deals in Colorado

Takers tend to be buyers shut out of bank loans and landlords hoping to put little down. Terms count as much as price here: ten percent down with reliable payments beats a lofty offer with zero down.

Hire an outside servicer to collect each payment and mail statements. Doing so shields the seller and leaves your buyer with a tidy payment record. For what happens when a note is later sold, see our note investing guide; a cousin of this structure is covered in our contract for deed guide.

Step by step

How to start wholesaling seller-financed deals in Colorado

1. Start with the seller. Find out how much monthly income, how much down and how soon.
2. Settle the terms. Fix the price, down payment, interest rate, length and balloon, if any.
3. Review the rules. Run lending requirements past an attorney, above all when the buyer will occupy the home.
4. Run the numbers. Use the MAO calculator alongside the payment schedule.
5. Sign and disclose. Sign with terms and disclose that you may assign.
6. Draft the paper. Get a proper promissory note and deed of trust written up.
7. Finish at title. Go to closing through an investor-friendly title company and arrange servicing.

A retired schoolteacher in Lakewood owned a paid-off ranch house near Belmar. She worried that a cash sale would push her into a higher tax bracket and she liked the idea of steady income.

Your deal: a $585,000 price, $60,000 down, and the seller carrying the balance at 6.5% with a balloon due in year 7. A lawyer drafted the note and deed of trust, and the seller knew from the start that you could assign the contract.

A Jefferson County rental owner took the deal over for a $15,000 assignment fee, and a servicer now routes roughly $3,320 a month to the retiree.

Colorado rules to know

Colorado rules for owner financing

We found no state real estate transfer tax in Colorado, but deeds carry a small documentary fee, so ask title to confirm current amounts. Security is normally a deed of trust, with defaults handled by the public trustee. Spell out the rate, the term and any balloon date in plain writing for the seller.

If the buyer plans to live in the house, federal and state lending and licensing rules may reach a seller who finances it. We did not verify those details for Colorado, so talk to a Colorado attorney before you settle terms. No wholesaling statute turned up in our research; wholesalers typically lean on the principal exclusion in C.R.S. 12-10-201. Our attorney guide goes further.

Learn it with a mentor

Build terms that hold up

Owner financing succeeds or fails on small terms. Our mentorship students bring us their term sheets, and together we shape structures that keep both sides covered.

FAQ

Seller-Financed Deals in Colorado: common questions

Keep going

More Colorado wholesaling guides

Read the full Colorado wholesaling guide or pick another situation below.

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