Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Creative Real Estate Financing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 1 year ago on . Most recent reply

User Stats

38
Posts
17
Votes
Kirsten Braddock
  • Investor
  • Ponte Vedra, FL
17
Votes |
38
Posts

Seller Financing Structure

Kirsten Braddock
  • Investor
  • Ponte Vedra, FL
Posted

I have an opportunity to purchase a property from another investor with seller financing. Im new to investing and this would be my first seller financed purchase. Im looking for some guidance and suggestions on the best way to structure this deal. The property is $80k and rents for $925. 

Most Popular Reply

User Stats

572
Posts
572
Votes
Derek Dombeck
  • Real Estate Consultant
  • Wittenberg, WI
572
Votes |
572
Posts
Derek Dombeck
  • Real Estate Consultant
  • Wittenberg, WI
Replied

I love buying and selling with private seller financing. The main questions I ask sellers is what are they going to do with the money from the sale of their property and then I build my offer from there. 

A deal I recently did went like this.

This seller was diagnosed with cancer and didn't want his wife to get stuck with the stress of landlording. He did however, like the idea of still bringing in monthly cashflow for his wife.

I bought his duplex that was in great shape but the seller was well below market rents. My purchase was based on the income that was coming in. I offered $5,000 down on a $132,000 purchase with interest only payments at 3% for 8 years at which time a balloon payment is due. ( He chose the interest rate ) 

I sold the duplex 30 days later for $155,000 with $10,000 down at 6% P and I payments with a 5 year balloon due. This loan is Wrapped around the loan I structured when I bought it. These numbers were based on the proper market rents.

My spread on this deal is $519 per month. We structured the balloons to coincide with each other since the underlying loan is interest only and the wrap loan is amortizing.  

Plus, after 30 days we have zero cash out of pocket.

The key to getting seller financing is finding the true needs of them and solving their problem.

Happy Investing

Derek Dombeck

Loading replies...