Seller financing help

[Brandon Ribeiro]

In speaking to one of my real estate clients, I found out that his mother is wanting to sell her home. I could easily comp it and sell it at 335-340,  however she is willing to let it go for around 300. 

I really like the house and would love to have it for myself, however right now financially I won't qualify for a mortgage being a new real estate agent with less than 2 years of income.

I'm pitching seller financing to them to see if they would be interested in doing that. it would be a 5 year balloon payment on a 30 year amortization.

my thoughts are to refinance it at around 2-3 years and pay her off. what are your thoughts? she would be making more than 300 in the end because of the interest, and I would be able to get a home worth more than what I'm paying for it, and would be able to rent out my current property.

how would this be structured? I've never one a seller financed deal before, if you have- would you be able to walk me through the process?

[Mitchell Marvin]

HI Brandon, if the seller accepts, I think it would be a great way to get into a property with little money down. Just make sure that the numbers work (more than just 10% below market value) and make sure you have reserves saved up in case the property doesn't appraise high enough for the refi. As far as structuring the agreement, get a good real estate attorney to make up a contract to protect both you and the seller, it shouldn't be more than a few hundred bucks. 

Lastly I just want to recommend not getting emotionally attached to the property and stick to the numbers. If you can't come to an agreement that works for both of you, just list it and earn the commission. 

I hope this helps! Best of luck to you!