owner finance or bank loan

[Alison Decastro]

This will be our first multifamily property that we buy, with plans to buy more as we find them. Not to live in. My question is the following...is it better to get a loan from the bank or take to owner financing(assuming same terms). Meaning is there a benefit to either for future purchases? For example building a relationship with the lender ?

[Jeff Greenberg]

After spending two days filling out loans documents and baring it all for the lender, I would always go for the owner finance if I can get it. Terms are negotiable so it depends how motivated the seller is.

I wouldn't walk away from OF to build a lender relationship. Next time you will have this additional property under your belt giving you more clout.

Another thing that I feel is worth mentioning. A lender will require a appraisal, environmental phase 1, and a professional property inspection. Don't leave off the last two just because you get OF. Another point for OF straight from George Ross. Years down the road you may be able negotiate to pay off the note at a discount. I don't think that will work with the bank.