Seller Financing (New to Multi Fam Investing)

[Glenn Larson]

New to real estate investing with a focus on the mulit-family (1-4 residential) space.  I am curious what typical seller financing terms/structure might look like.  I am sure the answer is "it depends" hence the term "creative financing" but was hoping people might offer a few examples to help me think more about how i might approach deals where the seller is motivated and the property as been listed for a long time.  Any info would be very helpful.  Thank you!

[Mohammed Rahman]

Hey @Glenn Larson  You’re right, seller financing really depends on the seller’s flexibility and the specifics of the deal, but I can give you a couple of typical structures to think about:

1. Interest-only payments: In this setup, you pay the seller interest on the loan without paying down the principal right away, giving you time to stabilize the property or improve cash flow before paying it off or refinancing.
2. Balloon payment: You might negotiate a lower monthly payment (possibly interest-only) with a balloon payment due after 5-10 years. This can be good if you plan to refinance or sell before the balloon is due.
3. Low down payment: Seller financing often allows for more flexibility with down payments. You might put down 10-20%, which can be easier to manage compared to traditional financing.

A motivated seller can be open to different terms, especially if the property has been sitting for a while, so just be creative and make sure the deal works for both sides. Good luck!