Owner financing apartment complex

[Jade Parker]

Hi,

I'm trying to buy an apartment complex by owner financing but not sure how to do it. What contract should I use? I am the buyer so do I create and complete the contract? Or does the seller? How do I offer to refinance in 2 years? The owner said he was willing to carry the note for 2 years but not longer. Please advise...I don't know what I'm doing.

[Michael Seeker]

@Jade Parker - I would suggest contacting several local title/closing companies and asking them for a simple purchase contract form.  I've also used one I pulled off Google several years back for several purchases/sales and have had no issues with it.

Regarding the carrying period, you want to include the loan term in the contract.  It should indicate the loan term (2 year balloon) along with the loan amortization (typically comes in 5 year increments ranging from 15-30) or stipulate that it is interest only (meaning no principle is paid down and entire loan amount due in 2 years).  You'll also need to specify the interest rate being used and I find it helpful to include a payment schedule so there is no confusion as to how interest is being applied/calculated or when payments are due.