As A Seller How Do I structure Owner Financing.

[Danny N.]

So I have a large piece of land I paid $140,000 for in 2015 and I have it listed for sale now and a guy made me an incredible offer, but I have to owner finance it. He wants to pay me $2200/mo for 10 years with $50k down. I was honestly hoping to sell it for $215k or so but this comes out to $300k+ over the time. How do I go about structuring all of this with an amortization table and what are ramifications if payments are missed ie how many are missed before a foreclosure happens. I have never done this before and I was selling the land by owner since it was paid for and was hoping for a quick and easy transaction. I literally just got this offer 30 minutes ago and my title company I used for my other deals is closed for the day now.

Just trying to gather more info on how to structure all this to minimize headaches in case tenant doesnt pay. Thanks again.

[Ned Carey]

@Danny N. since you know the proposed terms you can figure out the effective interest rate you would be receiving using a amortization calculator.  It looks like that works out to be 10% interest if you consider today's price as $215 K

You get to decide the terms of the contract and what penalties and or late fees are. 

There are two separate things you need; a Promissory note, and a security instrument, typically a mortgage or deed of trust. The note is the evidence of the debt. The security instrument is allows you to foreclose. The security instrument is recorded in the land records. Usually the note is not. 

While any title company can write up the loan documents for you, you want a good one with experience doing notes. They should ask you some questions about what terms you want. You may want to ask around at some real estate groups who the hard money lenders are. Then ask the hard money lenders who they use to write up their loan docs.