Understanding Seller Financed Notes

[Steve Burt]

Just wanted to check my understanding on seller financed notes. I have noticed in recent weeks and months the amount of seller financed notes listed on PaperStac has increased dramatically. Does anyone have an idea as to why?

Here is an example. My understanding is these are essentially people who are refinancing their own home or rental property without the use of a bank. My initial hypothesis has been to steer well clear of these notes because if an owner could use a bank to get refinancing or a HELOC then they would do it because this would afford them better rates.

In the linked example, the description is just written strangely to me but I am not sure if that is from my own lack of understanding. The 2 "buyer success" programs are difficult to parse. The Thousand Keys website looks like it was set up yesterday and the yield seems to good to be true. Looking up the property on zillow and it looks in my estimation to be terrible, there is no way a bank would extend financing on that. On top of it all, Ohio is a state where foreclosure can take up to 18 months. I was just wondering if the experts on this forum share my reservations so I can tell if I am on the right track.

I spoke at length about one example, but I do think this is highly illustrative of the type of seller financed notes that are hitting paperstac lately and hope this topic can be an informative discussion on whether these have unique pitfalls and risks.