Owner finance notes financing

[Mike Garza]

Has any investors use alternative financing sources to fund other real estate projects using owner finance notes?

[Kareena Heath]

People use owner financing and seller financing interchangeably.  Owner financing can be where the investor approaches the owner of the home with 100% equity and asked them to carry a note.  The terms of the note is up to the seller and buyer to agree.  I have heard of sellers agreeing to 10 years with no interest.  You simply divide the amount owed by 120 to get the monthly payment.  I have also heard of owner financing to mean the investor buys the house at a discount and then sells it to an owner occcupant for the full price of the homes in the area.  Typically, the investor will ask for 10% to 12% down and around 9.5% interest.  The length of the term is typically under 20 years, again, the terms of the loan is whatever the potential owner occupant and the investor can agree upon.

Seller financing is also used when the homeowner sells their home to an investor or an investor sells the home to an owner occupant.  

As a note investor I like to say I manufacture notes, I sell for terms, or i create notes.  this makes it clear what I am doing.