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Carrying a note on a paid off rental property
I have a fully paid off rental property with a solid tenant in place, but it's in a state with high property taxes (IL). The current tenant wants to purchase a home, but doesn't have a down payment larger enough to qualify for a loan. I'm thinking about doing owner financing and carrying the note. By doing this I can avoid a few things:
1. Paying increasing property taxes
2. Paying property management
3. Paying for property insurance
Because the property has increased in value I believe I can increase my monthly profit by a couple of hundred dollars and avoid the headaches of managing the property. My question(s) the BP community is what are the steps I need to take in order to make this happen?
This is what I believe I need to do:
1. Create a promissory note
2. Collect a down payment (10-20%) of purchase price
3. Transfer title
Thanks in advance for the help!