Seller Financing Terms on Property Installment Sale

[Andrew Li]

I like to seller finance California rental property on "Contract for Deed" installment sale to spread out capital gains tax over multiple years.

Seller gets down payment. Buyer gets equitable title to use and possess property.
Seller transfers deed after Buyer pays all installment payments.

General Questions

A. If Buyer defaults, does Seller give Notice of Default, terminate Contract for Deed (if Buyer fails to pay), and evict Buyer(if Buyer refuses to leave)?
B. Is 25 day grace period (10 day after Notice of Default + 15 more days) sufficient to cure default?
C. Is 20 day grace OK to cure default?
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Loan Pre-payments Or Early Payoff
A. OK to insert a contract clause to prevent excess loan payment OR early pay off for the first 5 yrs?
B. Prepay penalty is 5% of the amount being prepaid. Excessive?
C. Can prepay penalty be 10%?

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Loan Interest Rate
A. Instead of an interest rate, can Seller charge a fixed, monthly interest payment for life of loan?

Example
240K Seller carry loan to Buyer. No interest rate. Just a fixed interest payment.
2K/mo fixed principal payment and 2K/mo fixed interest payment for 10 yrs.

B. If an interest rate MUST be used, can it be 10%?

Thanks in advance!