seller finance

[Isadora S.]

Hi Everyone

Just upgraded to bigger pockets pro and I am very excited.  I have my eye on a 2 family and would like to present some kind of professional looking proposal to the listing agent for a seller finance deal.

Does anyone have a template or some suggestions?

Thank you

[Art G.]

I have worked on a lot of seller financing deals. The only thing they care about is how much money they are going to make.  So that is your angle.  I use a mortgage calculator from this website, I like it because it gives a visual break down of all the payments. Seller can see all the money and the structure, and thus not so abstract. 

I take the purchase price and add it to the total interest and tell them you will get $XXX from the sale.  That way it has a huge impact on them when they hear it.

They also want to hear of a downpayment so they know they get some money right now.  Plus I use this as leverage with the agent to let he/she know they are going to get their commission now.

Finally if they are still hesitant offer them a balloon payment option in 10 years. That way they make most of the interest and still get a big payoff.  This allows the buyer to build appreciation and equity to either refi or sell it.  I always word it as, "Seller may elect the balance to be paid off in 10 years, with one year notice provided to buyer."

This makes it an option, not mandatory.  Also it gives a time period for them to act to enforce the option.  If they do not give the one year notice then they did not elect the payout.