Instead, interest is accrued into the loan balance and paid at maturity (when the borrower either sells the property or refinances the loan).

I feel this reasonable to balance the interests of both parties. 

@Lionel Quiambao - Are you able to cover some of the balance while waiting for draws.

Hi everyone,
Alongside being new real estate investor in Indiana, and planning to utilize a buy-and-hold rental property strategy. I'm also a skilled handyman and was considering offering my services to other investo...

People who have no business being homeowners have the ability to buy homes.There is a balance between making home ownership attainable but not so attainable that it inadvertently brings way too many buyers in to play.

The new loan at a 5% interest rate would then pay off the seller's remaining balance, effectively transitioning your financing without additional down payment.It's also worth noting that some lenders might allow a "cash-out" refinance, where you could potentially take out more than the existing loan balance, given enough equity in the property, which could be used for further investments or improvements.

This structure provided a balanced level of protection without being overly cumbersome - that said 3 LLCs was a pain.If you're inclined towards maximizing legal liability protection, you might consider creating individual LLCs for each property.

You can certainly add some interest to this balance, let's assume 5% interest only, then he will have to pay additional $2625 which is equivalent 5 extra months of payment.

I bought for $10,000 down and pay $1,000 a month to the seller with a balloon payment of balance by end of year one.

If a good deal comes up that I can only get 10 or 15 years, then interest only helps or if it's negative cash flow, get another with positive cash flow to balance things.Seeing how 85% of my properties are seller financed or "subject to", sometimes I get terms that I can't change and sometimes I can dictate what I'll pay.