Need help understanding seller financing terms

[Tessa Rysztak]

This is my first "real" post.  I hope I'm putting it in the right place!

Im looking at starting out with a few small multi family investments, with seller financing. Right now, I'm working off the MLS. One of the homes I am interested in gives the financing terms right on the listing. It's listed at $39,900. It doesn't say what the rents are currently, so I know that I would need to find out that information if possible.

The terms listed are "Land contract options available ($5000DN/7.5%/$750.00/3yr payoff) Subject to buyer's credit report and/or proof of funds". Is the $750 they are referring to the payment they are looking for?  I can't figure out how they are coming up with this amount, if that's the case.  I'm hoping someone worth more experience can shed some light on this for me.

Thanks!

[Bill Gulley]

LOL, I know you're new, but you're the third one in a week calling 1-4 attached single family dwellings a multi-family. 1-4 is a single family dwelling, multi-family is 5 or more.

Now, the ad you're looking at is probably from a scammer type in the first place, common, and the ad isn't legal either for a single family dwelling giving interest terms without giving the APR, so, the ad is by some dimwit.

Saying land contract, you really don't want to go there as there are now deed issues, the fact that they circumvent foreclosure laws and you may be restricted as to having maintenance, repairs and getting building permits or other "official" matters accomplished since you won't be in title. 

Search here on BP for "Contract For Deed" it is called various things in different places.

I'll guess to that the property is overpriced. Looks to me like the seller is a  screw'em, default, rinse and repeat type.  

Now, that said, the seller will likely be in violation of new laws, could be, which means that if they are (let's say you move in) then you'd be in a good position to destroy the seller from various angles later on.

Yes, looks like they want $750 a month, that's probably more than rents for a 39K duplex. Looks like a rip to me as an investment.

Might be a good book topic, How to Buy from Predatory RE Investors and end up having them pay you! LOL

Investors could read it to know what not to do and the public might learn how to eat the predator's lunch. Good luck :)