Stable Future Income Option, Owner Financing For The FULL 30?

[Joe Trainor]

Hey All,

I wanted to explore an exit strategy some of you have probably debunked, can vouch for or have at least thought of. This exit strategy stems more from a mindset of getting a consistent return over a long period of time.  Let's assume this option would be applied to just 1 property out of a smaller portfolio of 10 properties.        

Traditionally I have read seller financing is geared towards buyers that may have exhausted the amount of loans they can get, maybe there is a lack of credit history or maybe they have a less than desirable credit history etc... 

From the perspective of the seller, with interest rates on the rise and no telling where they will rise and fall to over the next 30 years, has anyone entertained or actually provided seller financing options to QUALIFIED buyers at current market rates?  Everything I've read only talks about offering at higher rates and a higher asking price.  What if I wanted to find the best buyer with the least amount of risk for default while getting a long term fair return. 

My mindset is, with rising rates, does a collateral backed guarantee of 5-6% sound so bad over the next 30 years on one investment (Assuming rates don't drop back below that and the buyer refinances out)?  Yes, you would probably lose the ability to get a higher asking price but could still dictate down payment amounts.  Yes, you could make more income by going the traditional route but it could be marginal if they refinance out of it quickly and you have a higher risk of default.  I understand a highly qualified buyer can still default and can still leave the house a wreck when exiting but there is definitely a lower risk of that happening.  I am sure everyone's current financial position will play a role on how they respond.  Lets assume the seller would easily live another thirty years and have other properties that he/she would NOT do this on.

Poke some holes in it, I'm just thinking out loud.