Seller Financing Questions

[Oron Subayi]

Hi guys

Still learning on real estate, and one of the strategies I saw yesterday was seller financing

I have few questions on it..I want to make sure that I understand the concept, and I hope you can help me : )

1. All articles\blogs etc are talking about getting a "loan from the seller". The load is not an actual loan right? as I understand it, the load is actually register the property on the buyer's name, am I right?

2. How to deal with additional payment like rehab, insurance etc in this strategy?

When going to a bank or other lender, you can ask for a load that includes the additional expenses, but it seems that it is not relevant in this case. Looks like I must have the money in my bank account, so the low paydown not relevant as well, because I must have money for the other expenses

3. Why is interest involved in this kind of strategy?

When a buyer is negotiating with a seller, they agree on a price for the property - let's say the price is X$.

Both sides agreed to X, so why can't the buyer pay X$ with seller financing, and no interest at all? It seems that the seller will be happy to get the X$ : )

Thanks all!

[Oron Subayi]

Thanks @Zane McLaughlin and @Bill Gulley

Well I'm still in learning phase, and my questions were just after this part in Brandon's beginners course here in BP, and some googling

As a beginner it is hard for me to extract the answers from yours, so I'll try to sum the answers according to my questions:

1. So I'm correct - the loan is actually changing the note on the asset under the buyer's name

2. This kind of deal is mainly for houses that need no\minor rehab or any other one time payment. And if the assets do need some treatment, I'll better save cash in my bank account for this

3. Couldn't understand the answer to that question

Just to be clear, I'm not talking about a situation where the seller want "seller financing" deal, hence the price is higher than usual

I'm talking about a regular deal where the suggestion of "seller financing" is mine, and we already agreed about a price that both sides are happy with

So after setting a price that both sided are happy with, why can't I use this method without an interest? The seller will still get the money he wants

Thanks : )