How to start seller financing

[Grant Doyle]

Hello everybody! I have been a long time podcast listener and lurker on bp. I do not currently own any properties but that could be changing here soon!

I have had my eye on a property I use to live in while at college. The seller has said that the house is 'too big for them' and they are wanting to sell (they own other properties and are farmers). It is a 9 bedroom house on a third of an acre in a dense college town. It currently rents for $430 a person ($3870 a month, $46,440 a year), insurance cost of $1500 a year, and an estimated ~ $6000 a year in taxes based on online calculators. Because it is a high cash flowing rental in a high demand market the asking price is $410,000. With a $400,000 mortgage and a 4% rate that is a $1900 a month mortgage. 

I have reached out to her and she is willing to consider seller financing. They are also farmers and are currently harvesting and will touch base with me in a week, which gives me time to prepare. My question is, how do I put together a seller financing "pitch" or deal. I told her that I think it would be best to raise the purchase price a bit and lower the rate to reduce her tax burden and better my rate to try to entice her more into the idea of seller financing. I am struggling to put the numbers together and give her a solid idea as to what we should do. How would you go about setting up this pitch/deal, what tools are available to me, and what advice would you have for my first deal. 

Please feel free to reach out to me by message, I am always willing to get in touch and learn a thing or two!

Thanks!