Offering owner financing. Yay or Nay?

[Eileen Murray]

8 months ago I purchased a cottage for my daughter to live in with her pitbull (sweety) while she started a new job three hours away- no apartments would take a pitty. The expectation was she’d live in it for two years and transfer back. She fell in love with the area and just bought a great house. So- now I want to sell. Too new to want to long distance landlord.

I paid 20k for the place and it cost about 2k to close. My daughter and I spent about 4K on cosmetic improvements- it’s really cute and cozy inside now. 

However, the place will need a roof within a year or so, it needs all (7) windows replaced (will have to be reframed as the windows are all wonky) and the foundation is sagging. 

I listed it for 28,900 and just got an email offering 7k down and monthly payments “until it’s paid off”. 

I was already considering doing a lease option if the place didn’t sell by the fall. But owner financing is a complete unknown to me. 

I know Dodd-Frank is a deterrent but I don’t quite understand that law. 

Any advice- pros and cons, how to structure, experience anyone has would be greatly appreciated!!

[Thomas S.]

If you don't need the cash owner financing is a good way to increase your profits. Keep the term short, maybe a couple of years. I charge 10% interest on owner financing. In a situation of owner financing the plus is you do not need to waver on your sale price, they take it or leave it, no negotiations.

You will need a lawyer to draw up the contract and the buyer is responsible for the legal fee.