Seller financing deal

[James D.]

So, I asked a property seller for seller financing on a 35k single family that I plan on renting for approximately $900-$1200 per month. This is what the seller offered:

1. Sale price 35,900.00
2. Down payment 10,000.00 (We can discuss this amount)

Financed 25,900.00 @ 7% monthly payment 5 yr term 1 1/2 year balloon =

$431.00 principal and $151.08 interest total $582.08 a month

The balloon means in 1 1/2 years you need to do one of the following to the balance 1. Refinance 2. Payoff 3. Refinance our terms. I would prefer #1 or #2 as I do not want to hold debt.

This would be in writing and a mortgage would be put on the property.

Should I take it? This will allow me to put this property into my business (S-corp) and refinance in about a year in the business.

[Devan Mcclish]

@James D. Be careful with the 1 1/2 yr balloon. Typically a bank likes to see 2 years tax returns on a property before they will refinance it. That is something to keep in mind unless you have a good banker that you have built a relationship with then no worries.

and your payment would actually be 512.85 a month. 

See if the seller will give you a 10 year term since he wants 7%. that would reduce your monthly payment to 300.72, netting you 600-900 a month