Finding seller financing leads and structuring the deal

[Rhianna Wann]

I'm looking for some advice on financing my first rental property. I'm planning on starting with a 2-4 unit property that needs some fixing up but is not a total rehab. Ideally I'd BRRR the property and hold it long term for the cash flow. But first I need some clarification on seller financing. Here's what I'm running into...

If I’m going to be able to buy my first property in the next 6 months (which is my goal), it will need to be through seller financing, as all of my current extra income is tied up in fixing up my primary residence. Side note - once the rehab is done, we can refinance and pull money out for investing, but I’d like to get started sooner than that. So for now, seller financing seems to be our only option. Here are my questions:

- What’s the best way to generate leads that specifically might be open to seller financing? We’ve visited a few properties with our agent, but each time we ask if seller financing is an option, they say no, or yes, but only with 50% down. I feel like we’re wasting our agent’s time, and not using our time very effectively seeing properties that we just can’t buy.

- I’ve learned that you need to talk with the owner, figure out their situation and what they need in order to submit an offer that can be mutually beneficial. But if both parties are working through agents, how do you go about setting that up? Or is this usually only an option with “for sale by owner” properties?

- In the current market, what type of seller financing are sellers looking for? Larger down payments? Shorter term contracts? Higher interest rates? I’d love to see some examples of seller financing offers people have put together for reference. 

- Is seller financing even a smart financing method with the looming economic downturn? Won't it be impossible to refinance the property for a good number once the property's ARV drops? I would just hold onto it and wait for the economy to come back up to refinance, but it seems like most sellers would be interested in shorter contracts as opposed to 10+ year contracts.

I’m sure I’ll think of more questions later, but this is a start. I just feel stuck and unable to move forward with a deal until I learn more about this topic. Or should I hold off all together and wait until we’re done rehabbing our primary residence and can pull money out of it for investing? That would probably mean delaying buying for 6-9 months.

All thoughts/ideas are appreciated!