Working on my first seller finance deal

[Greg Strunak]

Hello, new to the bigger pockets forums. I'm looking to make my first short term rental deal using seller finance. I was able to find some sellers offering some deals with seller finance. I was hoping to get some good insight on how to negotiate these deals to make this a good deal for myself. One seller is offering :

$10,000-$15,000 Down, 12% Interest, 15-Year Term, 15-Year Amortization, 10-Year Prepayment Penalty, Can Sell with Assumption of Loan (After a Certain Number of Years Owned) in Reduction of Years) The price of the unit is at the high end of the market as well.

The other seller is offering:


(25% Down, 9% Interest, 3-Year Term, Interest Only, Willing to Amortize, 1 Point at Closing on Loan Amount. Also asking for a high end price for the unit.

I would love some insight on how to negotiate these deals to make a good deal for myself as well as the seller. I will also add these are vacation rentals, short term rentals. IM ALL EARS

[Andrew Postell]

@Greg Strunak the way we usually negotiate in these types of scenarios is we base our negotiation on what we can get through a NON-owner financed deal.  Meaning, if a regular mortgage would allow 5% down with 2% interest rate...well, then there's no reason to go to any of these options.  Now, that's not the current lending environment but the point is still the same - what lending terms CAN you get?  And then work backwards from there.  If their terms are worse than your regular loan, then you should have your answer.

Hope that makes sense how I am describing it but feel free to ask anything additional.  Thanks!