Seller finance question

[Ernando Solis]

https://www.trulia.com/p/al/bi...

I want to find out opinions on a subject to deal.  Property is recently remodeled and had a tenant renting for $900, property management in place.  Property was appraised for 90k and has a zillow estimate of about 103K.  I am asking $88k total price, $33k down payment to me and buyer takes over loan with a balance of $56k at 5.5% interest rate, payment is $512 monthly with taxes and insurance.  Any thoughts?

[Marco Bario]

@Ernando Solis -

Rather than allowing the buyer to be responsible for your loan payments, you can carry back and create a wrap or all-inclusive trust deed (depending on the state) 

Example:

Selling price = $92,000 (why not ask for a little more b/c you are offering to finance?)

Down Payment = $17,000

Amount Financed =  $75,000 @ 8.5% for 240 months*

At closing, you will receive $17,000 + a note and mortgage or deed of trust for $75,000. You won't pay off the $56K 1st lien

Each subsequent month you'll receive $650 from the buyer. From that, you'll pay $512 to the underlying lender. 

You'll keep $138/mo and you'll know your underlying loan is being paid. If payments to you stop, you can foreclose on the buyer.

* make sure the term of your loan is longer than the remaining number of months due for the underlying loan