Negotiating seller financing... Rules and Regulations?

Question

Hey BP,

Perhaps this varies by state (I'm in Ohio), but if I have a deal made and the seller is willing to offer financing, are there any rules and regulations for the buyer that differ significantly from conventional mortgage loans?  Are the terms generally open to negotiation between buyer and seller such as interest rate, terms, conditions, etc. and are there any rules the government butts in with this process?  Would banks frown upon me getting the 25% down payment for a property via seller financing, and then the other 75% of the financing through a standard 30yr note with the bank?  Any smaller community banks credit unions get involved much with little to nothing-down multi-family property loans?

Thanks,

Roger

Benjamin Clark · Answer

These are questions that you really want to present to a good real estate attorney who can advise you in what you are and aren't allowed to do regarding Ohio seller financing. That said; in my experience if your seller is offering only partial financing and you are going to your local lender for the balance, it would be the lender who may regulate what type and source of secondary financing you may place on the property. Example you may have a first position lender that will not allow a 2nd position lien whatsoever. There may be a lender who may only allow other liens at a certain CLTV. Many many variables and way too many to address. But if you have a flexible enough seller who will assist one way or another in financing their property it makes it just that much easier to move forward in your investing career. Just make sure you have a thorough understanding of how all the processes work or have a professional you can hire to assist you. Goodf luck