Making a Case for Seller Financing

[Mark Douglas]

What's been your experience with this?  If the owner doesn't necessarily need to cash out from the sale, are they typically willing to carry the note?  

I talked with a guy that wanted to sell two triplexes, and I brought up the idea of him carrying the note, and he seemed interested.  Just wanted to hear from others about what works and what doesn't seem to work. 

Obviously, it has something to do with the size of the deal, too.  A 6 unit deal vs. a 300 unit deal is apples/oranges.  I'm looking for 10-20 units.  This may be "small enough" for someone to be willing to carry for 5 years, until I refinance out...?  

[Mike Dymski]

seller avoids or spreads out capital gain for tax purposes

seller knows the property and is comfortable with it's ability to support the note

seller does not have an alternative investment lined up for the sales proceeds or negotiates favorable note terms with the buyer relative to alternatives

distressed property that makes conventional financing difficult

Seller financing is not typical, but it is not uncommon either. Many times it is the intelligent buyer who makes it happen by helping to educate the seller (and the seller's broker) on the benefits for the seller.  It can also be used in negotiation (i.e. i can go higher or meet that price but need you to take the note or x% of the debt).