What owner financing terms are investors doing these days

[Matt Slease]

Have an opportunity for a local duplex but the only way to make it work would be a lower than 25% down payment.

Owner wants 160, I would comfortably do 10% down maybe more if I have to.

What are some ways to structure this and what’s a good interest rate for owner financing?

Should I consider an interest only loan for a few years and then refinance?

Open to any and all ideas

[Marco Bario]

@Matt Slease - When using seller financing, everything is on the table for negotiation. First, learn what's important to the seller. Ask open-ended questions like: "why would you sell such a nice property?" As a real estate investor, you're in the problem-solving business. When you become a solution to the seller's problem doors will open. 

If it's important to the seller to get the highest asking price possible, offer that you can do that if they can be flexible on terms (downpayment, interest rate, loan term, etc).

If no longer being a landlord will cause them to miss monthly income, offer that you can provide income in the form of loan payments and back into the numbers from there. 

If downpayment is important and you only have 10% now, ask if they are open to collecting additional down payment over time. For instance, they could create a 2nd with a shorter-term in place of a downpayment. 

When originating seller-financed loans, higher interest rates are of course better and should be 4-5% higher than institutional financing rates. As a buyer though you can and should offer much less. I've seen many 0% loans and right now I'm working on closing the purchase of one written at 2%.