Setting Up and Marketing 4.25% Seller Finance Deal

[Jared Haxton]

Hi BP Community,

I own a 2-bed/2-bath condo in Prescott, AZ (near Embry-Riddle Aeronautical University, hospitals, and medical facilities), and I’m exploring selling it via seller financing. We have had it as a rental for 5 years now and have had only 15 days of vacancy. I’d love your input on whether this deal could appeal to investors and how best to structure it.

Property Details:

• Worth: ~$300,000
• HOA: $273/month, Taxes/Insurance: ~$170/month
• Current Rent: $1,880/month (long-term); next tenant advertised at $1,950/month.
• Mid-term rental potential: ~$2,400/month (I haven’t tried this, but it’s my estimate).

My Financing Idea:

• Large down payment: ~$125,000 (This is my priority to reinvest elsewhere).
• Seller-financed balance: ~$175,000 at 4.25% for 30 years.
• Buyers take over taxes, insurance, and HOA.

Questions:

1. 1. Does this structure make sense for investors, or would you recommend different terms to make it more appealing?
2. 2. For those who’ve structured wraparound mortgages, what strategies have you used to avoid triggering the due-on-sale clause?

Thanks for your thoughts! It has been a great rental and would continue to be one but I think I am ready to sell it!