Updated over 6 years ago on . Most recent reply
Seller Financing Structure
BP members!! Advice is needed!
I am a new investor with one property under my belt already, but I am looking to obtain a new property through creative financing options. I want to approach the owner of the home with an offer for seller financing. The owner is a relative, the property is neglected and it could be an amazing investment. Without a lot of freed up capital I wanted to approach the owner with this deal. Any ideas on how to structure this deal in a way that it is enticing to the seller and a great option for myself/additional investors? Any help or examples would be amazing to learn about.
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- Real Estate Broker
- Cody, WY
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You can start by figuring out what they want. Before making any offers, talk to them and find out what they really want. Do they want $5,000 to pay off some credit card debt? Do they want to pay off their primary residence? Go on vacation? Know that the property will go to someone that will care for it? Monthly cash flow? Reduced taxes?
I spoke with a guy that owned six units for 30+ years. He was in his 70's and asked me to manage his rentals because he was getting too tired. I asked a very simple question: what do you really want?
What he really wanted was to rest but he liked the steady income it provided. He didn't want to sell because he knew Uncle Sugar would take a big chunk of it. So I talked to him about the benefits of owner financing (chunk of cash up front to take a vacation or put in savings, reduced taxes, steady paycheck every month, no involvement with tenants). We negotiated a deal and he even sold the property to me 15% below what I told him it was worth! It created a win-win because I was truly looking out for him and not just myself.
- Nathan Gesner
