Investor · Denver, CO · Member since 2017 · 94 posts · 42 votes
I need some advice. I have a property that I purchased in Indianapolis to flip but things aren't panning out as I hoped. I am now trying to sell the property and offering seller financing. I have someone interested, but they are only offering 3k down on a 63.5k purchase price, with 10% interest for 12 months. If rehabbed the projected ARV is 145k.
I haven't done this before, so I am wondering if I should pursue traditional seller financing where the deed will be transferred in the buyer's name or do a land contract where the deed stays in my name until they pay off the Note?
Also, any other tips and due diligence suggestions would be greatly appreciated.
Real Estate Agent · Westchester, NY · Member since 2021 · 77 posts · 35 votes
5y
@Jennifer Ward
I would do a land contract with a balloon payment after 3-5 years. At which point you can renegotiate the terms or they find other financing to pay the balloon payment and get the deed.
I always have my sellers keep the title in their name until there is a full payment to them in whatever form that needs to be in.
Investor · Denver, CO · Member since 2017 · 94 posts · 42 votes
5y
I should clarify, the property currently isn't livable...no mechanicals and electric isn't wired to the panel, so not sure if that makes a different with land contract vs traditional seller financing.
Indianapolis, IN · Member since 2014 · 206 posts · 127 votes
5y
@Jennifer Ward 5% equity requires you to foreclose even on a land contract in Indiana. Not a lot of benefits anymore. I personally would sell on a note and mortgage.