Referral for Seller Financing?

Question

Hey all. So my partner and I just negotiated on a 6 unit property with the bank providing 75% and then the seller providing 25% (5% @ 4 years). The numbers make sense in terms of monthly net income to seller / bank payments. We won't make much (if anything) every month, but it's our way of building equity without putting any money down. We have other properties (generate great cash flow) which will help if we fall short because vacancy is more than 5%.

However I wanted to know if this seller (old man in his mid 80s) can provide seller financing ? I think since this is his one and only property he can do it without any checks or licensing.

Second thing was does anyone know any good priced Lawyers in the Philadelphia/NJ area that has experience in seller financing?

I appreciate everyones help. Thank you!

Ravi Patel · Answer

Steve,

We aren't doing a balloon payment with interest. We are going to pay him monthly installments principal + interest. Also we spoke to him about it, and he is fine with it because it also helps him from tax situation and helps us from financing situation because allows us to scale out. Also we are getting 25% owner financing, not 100%. But appreciate it will reach out to our title company and ask about the NWMLS PSA addendums

Steve Vaughan · Answer

In my area I used the Method Of Payment Addendum that comes standard with the NWMLS PSA.  The title co then has it drafted by one of their network attorneys for about $300.

I'd get a referral from a/your title co.  Check on NY State standard PSA boiler plate, pre-printed addendums.  The title co's and their referral attorney's are most used to those.

So this seller is in his 80's and only has this property he is selling.  He's been dealing with tenants and toilets for 50 years and is finally getting a little payday.  Wait. No he's not. You're asking him to carry 100%.  If I had the money in my account (as you and your partner do) I wouldn't make him wait another 5 years for a little coin.

Put yourself in his shoes @Ravi Patel.  Do you see yourself doing this forever only to finally get a little payback when you are 90 years old?

Ravi Patel · Answer

Yes. I spoke to the bank. They only need to see that we have the down payment money in the bank which we do. They don't care whether we use it to pay down payment or not.

I am just curious on any lawyer recommendations who has done this before to kind of get all sides of this deal.