Have you ever done seller financing when buying a property?

Question

Have you ever done seller financing when buying a property? What were the terms? how did it work out for you? Do you have any recommendations for a first timer like me?

Brandon Sturgill · Answer

@Joe Linares It's essentially the only way I acquire property...residential and commercial...bought a house this week with a purchase money mortgage 60 cents on the dollar...and some duplexes recently 40 cents on the dollar...a 150-year old hotel...and negotiating 24-units currently...

Anyway, the concept is to focus on free-and-clear owners...mom-and-pop with no liens. The physical property has very little to do with the acquisition...this is all about the sellers, meeting individual needs, and creating win-win outcomes. We offer 100% repayment guarantee on every property we purchase...if we default, we'll give the property back...no questions. You need firm systems in place...from inbound and outbound marketing to lead capture and conversion, to site visit and educational materials...the systems support the deal and the appearance of being professional puts people at ease.

To your question, we open with a 10% down payment, shoot for a 36-48 month note, and offer above market rates...usually 7%...always a 30-yr amortization. We also cover all closing costs if the deal is stellar...with the exception of prorated property taxes...we'll even pay real estate commissions if there is an agent involved...

If you want to learn more, feel free to reach out

Blog Post: https://www.biggerpockets.com/member-blogs/5871/84456-close-your-first-seller-financed-deal

Arlan Potter · Answer

On a 32 unit deal

70% bank 20 year AM

10% me

20% seller financing  6.5% 10 year contract - We paid off on a 5 year AM(too short really)

Joe Linares · Answer

@Brandon Sturgill I will read your blog! Thank you!

Mike Flora · Answer

@Joe Linares Joe!!! I thought you were talking to us about this one? If you still got the guy thinking about carrying the note with you hit us up.

Justin B. · Answer

I've done it once.  I'm ~3 years into it and it works well.  For me, going with a bank is just easy.  I know the process well and I've got processes in place that make it easy and painless.  So for me, I only do seller financing if the seller is willing to beat what the bank offers me.  If the seller wants to do 1% less interest or a much lower down payment, etc, then I would do it.  In my case, he offered the same down payment and 1% less interest rate, so I did it.

The last thing I'll say is treat it like a bank would and have a solid loan document in place to dictate everything so they can't just call it on you at any time or change the terms on you.  Make sure everything is spelled out as to how it will work and have it signed.

Dennis M. · Answer

It’s the Only way I buy property . Banks suck . I look for 5-10k down . Owner will hold note atleast 7 years, fixed interest rate only a few points over bank rates , no balloons .ability to payoff in full anytime .

Joe Linares · Answer

What up buddy!

@Mike Flora

Have you ever done seller financing when buying a property?

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