SELLER FINANCING OR CONVENTIONAL FINANCING

[Tim Zajicek]

was wondering what the pro's and con's would be of seller financing? Look at buying a 9 plex and the owner is willing to do the following: 20% down, 25 year amoritization, 3 or 5 year balloon (I pick), 5% interest rates. Most commercial lenders in MN right now are 25% down, 5.125% interest with 7 year balloon.

[Rod Khleif]

@Tim Zajicek

Hi Tim, for the most part those are good seller financing terms. The one aspect I'd negotiate for is to increase the balloon to 7 or 10 years. 3 or 5 is too short. If the seller pushes back I'd offer a higher interest rate if the numbers work.

As others have mentioned try to determine his motivation for selling and for a short balloon. The more you know the easier it is to create a win-win.