My mother has a condo in a building that is 50-55 yrs old in North Bergen NJ. She wants to sell it but we have an existing tenant who has been there a long time and is over 100 yrs old.
A buyer who is interested just got turned down for a conventional investment loan from Wells Fargo b/c I think the rent would not show enough income each year with a loan.
I have 2 1questions
a. Does anyone know investor friendly lenders who might finance this? The buyer also bought my mothers other condo last year for cash and is making around 10% return so he needs something to shield from taxes. Most likely the tenant will be deceased/moving with family in the next 2-3 years.
b. Has anyone done seller financing for a condo type of property? What were the terms? Is it crazy to any longer than 15 years? It would help with coving some of mom's health aide bills.
You could offer seller financing with say a 5-year term, no prepayment penalty, and interest only (paid monthly). I would probably put the interest rate a little higher than what they would get from a bank. This way it incentivizes the buyer to refinance at the earliest possible date. If the rate is low, they will hold off until the end of the term to refinance.
@Timothy Heck if your mother wants to hold/ carry a note she can do seller financing. That just means she isn't going to get the full purchase price at closing. However she will get it according to the terms that are agreed upon. You could reach out to a local credit union and see if they have loan product for it. If wells turned your buyer down it is either your buyer or non financeable condo for fannie and freddie products.