Tenant wants to purchase home and asked me to carry note.

[Jon Wesner]

I own a single family residence in CA and the tenant approached me about buying the property.  I own the property free and clear and am contemplating carrying the note.  Home is worth 375k.  I have no idea where to start to structure this deal so any advice would be appreciated.  I am currently collecting $1900/ month rent.  Thanks

[Adam Adams]

Go Google a mortgage calculator to decide if you want to. 375k at 7% for 30 years is $2495/month. And you can get a down payment too. Let's do 10%, which is $37,500. That leaves $337,500 to carry. That's $2245/month and you aren't the landlord. To me, it all sounds great. I would ask for referrals for an attorney who can draft up the note. Someone with an originator's license. 

You can board it with a servicer for a small monthly fee. They can also escrow the taxes and insurance and make sure they get paid. Or just handle it yourself. Just make sure you keep your books clean on how the P&I are applied. If you ever have to get legal, that will come up.