Seller Financing Deal Within the Family

Seller Financing Deal Within the Family

Member since 2022 · 2 posts · 0 votes

Hello everyone. This is my first post and I'm really hoping to get some good advice. I've been listening to the BP podcasts and reading a bunch to gain some knowledge before diving in to real estate investing, but I was hit with some news that requires immediate action. 

My brother sent me a business plan that he wants to start up with me involving our grandmother's 80 acre farm. We've talked about buying it for a while, but we haven't been in a position to purchase it. She's not doing very well though and she actually suggested we buy it now because she's not sure how much longer she has left and if we don't buy it she's going to put everything up for an estate auction in her will. We're trying to keep the property in the family but my uncles are more interested in collecting an inheritance so we're trying to come up with a solution that makes everyone happy. In our scramble to try to figure something out, I suggested using seller financing so we could establish our own terms that would make sense for everyone in the family. I haven't been able to find a whole lot of great information regarding the actual development of a seller financing deal. 

Does anyone have any advice regarding some things I need to keep in mind when talking with my attorney? 

I'm also wondering if there's anything unique that I need to consider about crafting a deal knowing my grandmother will likely not be around much longer? Do I need to address what will happen with the note when she passes?

Any advice would be greatly appreciated!

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  • Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 378 votes
    3y

    Address in the note what will happen if anything were to happen to either of you. It's a conversation to have with your Grandma because if she does pass, will she want the payments to go to an heir? Or does she just want some money for the rest of her life then it's all yours?

  • Member since 2022 · 2 posts · 0 votes
    3y

    @Nathan Harden Yes she wants my dad and uncles to collect an inheritance. I’m just not sure how that would work with transferring the note to multiple people or if there’s anything similar to the due on sale clause in this situation.

  • Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 378 votes
    3y
    Quote from @Joshua Cornell:

    @Nathan Harden Yes she wants my dad and uncles to collect an inheritance. I’m just not sure how that would work with transferring the note to multiple people or if there’s anything similar to the due on sale clause in this situation.


     You will be fine. Just make sure that an attorney overseas everything and gives it the thumbs up. My buddy just bought a trailer park with seller financing and only paid the seller $25k downpayment and free space rent for the rest of the sellers life. He is in a similar (kind of) situation because this lady has ZERO heirs or anything to pass it onto so he is talking with an attorney right now to see if the seller died tomorrow, if he would have essentially just gotten a 26 unit trailer park for $25k

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