To Owner Finance Or Not?

One thing to keep in mind, is that there are various exit strategies for real estate. Us long term wealth builders cannot afford to overlook something that can ramp up cashflow and get us retail prices for our properties. How does owner financing ramp up cash flow you ask? Management, Maintenance, and Insurance. That can be as much as 30% savings. Imagine pocketing an extra $ 200-$300/mo on a $1000/mo rental!! How many of those would it take to make a dent in your own mortgage payment? It also eliminates one of the major hurdles to entering a real estate market that you don't live in or near. Finding quality management can be rough in some areas. People who own the houses are responsible for the repairs, so no maintenace calls eating into profits. Owners are also financially tied to the property, so you have much less chance of a vacancy. Not a bad deal, huh? Just consider that since you would be a note holder or have optioned the rights , it is not the same hedge against inflation that a rental would be. Note values go down as inflation goes up, and any equity created above an option price would be the purchaser's. I have held notes on numerous properties, and have had great success. Just remember to get a decent Down Payment so that the new owners will be financially invested. Harder to walk away from a property that you put `10 to 20 percent down on than the one you only contributed 3 percent to. I will soon be experimenting with Lease Options as well. Unlike many others, I personally believe in doing some of each.