Bought my first commercial property Seller Financed Pros & Cons

[Steven Foster Wilson]

I recently purchased my first commercial (5+) apartment building near Columbus OH and was able to get seller financing on it! Here are my thoughts on the pro's and Con's of seller financing something like this.

Pros:

- Because the seller was willing to carry a mortgage, we were able to close in 3 days. This allowed me to be competitive.

- No mortgage meant no underwriting and no additional lender fees, saving me thousands in closing costs and of course a lot of time.

- The seller was willing to take a lower than market rate interest on the property, simply because He said he was happy with it.

Cons:

- The Seller needed cash up front so I ended up putting 49% of the purchase price down, this was a huge chunk of capital upfront.

- The property also needed a heavy renovation, and since I didn't get a construction loan, I had to front the money for renovation.

Overall there are still good deals in the Ohio market, some make for good seller finance deals, and some do not. If this deal had not been so competitive I probably would have been better off getting a construction loan on it. Just figured Id share as a lot of people always say they want seller finance deals, but its not always the best option.