The individual owner of a seller financed mortgage enjoys a notable advantage over a traditional financial institutions, direct one on one negotiation capability with the borrower. its an advantage for negotiating new terms, adjusting interest rates, and addressing unforeseen issues.We have heard that this is a way for the owner to avoid "Capital gains"?

I factor my acquisitions on Adjusted NOI base, out of fear of one off capital draws needed to continue typical rental operations.

I factor my acquisitions on Adjusted NOI base, out of fear of one off capital draws needed to continue typical rental operations.

Sold a rental with ~$260K adjusted basis for $615K.

Consider diversifying your investment portfolio with a mix of fixed and adjustable-rate mortgages.

Also it creates problem, lets say in one zip code we had 100 homes, i would say 80% of the settler in that area would not even able to pay the mortgage if they have to adjust to today's price. this would create unique problem where they could be cash poor but having large equity (think like baby boomber that purchase 125k homes in santa clara in 1981), since they can no longer afford to pay mortgage, hence they prefer to sell, they can get 1-2 mil easily and  then rent or buy elsewhere, live in florida for sure.

You might need to do a manual underwrite which could decrease your purchase power.

In the long run I will probably fall a bit behind market rents on average and then do a modest re-adjustment with a turnover.

If you want to buy 300k duplex and want to have class A tenants in fairmount, well you're out of luck and need to adjust your purchase price standards.

You'll have a "base rate", usually based on LTV and credit score on a grid, and then you'll have "loan level pricing adjustments" (LLPAs) that will adjust that.