Some pitfalls in that. Why, in this rate environment, would this be attractive?
It's such an obscure thing, there's bound to be scams.
Plus, why would any one person take on the headache and risk of being a mortgagee for a paltry 3%-5%?
Because the “mortgagee”, in that case, may have:
—Significant RE Asset base, but doesn’t want to rent it.
—Wants better return than leaving their cash in a Bank, etc., but likes the security of RE investments relative to other options like the stock market.
—Doesn’t want to face a giant taxable capital gain in one tax year.
—And you don’t charge 5% interest on a contract...
Because the “mortgagee”, in that case, may have:
—Significant RE Asset base, but doesn’t want to rent it.
—Wants better return than leaving their cash in a Bank, etc., but likes the security of RE investments relative to other options like the stock market.
—Doesn’t want to face a giant taxable capital gain in one tax year.
—And you don’t charge 5% interest on a contract...
Because the “mortgagee”, in that case, may have:
—Significant RE Asset base, but doesn’t want to rent it.
—Wants better return than leaving their cash in a Bank, etc., but likes the security of RE investments relative to other options like the stock market.
—Doesn’t want to face a giant taxable capital gain in one tax year.
—And you don’t charge 5% interest on a contract...
You sound like an experienced banker.
All good points from the seller's perspective, but most folks above were more stymied by the buyer's motivation.