Most seller finance notes have interest rates in the 9-10%+ range.Also, 5% down is very little skin in the game for the borrower.

I’m always sensitive to our borrower’s costs. 

Hello, I own a property with someone else but they have been MIA, what can I do if we have papers to sign?

Borrowers can acquire a primary residence from up to 1-4 units for as low as 5% with conventional, as the regulation was approved last year of November 2023.

Seek out the smaller relationship oriented banks in your market and begin borrowing from them even if their terms are slightly less competitive than a bigger bank.

This will allow you to continue to borrow more, give you cash flow and appreciation.  

Any overage would be due to the borrower or another lien holder. 

Its a tough subject because logically, they are joint and several guarantys so rationally a 100% guaranty from each of two people (one 740 one 680 for example) is ALWAYS going to be better than just one 100% guaranty from someone at 740 (so it wouldn't make sense to have a better rate for the latter)The problem is that there is fraud and "straw borrowers" out there where someone who is not involved in the property signs on to boost score and terms - so many DSCR Lenders in response either do the "non-rational" thing and price to the lower to avoid the fraud or use the higher of the two (and either be a little loose with things or just stay vigilant on any funny business)

Also you would not reduce the price because of the interest payment. that is not how it works.3. yes the note could be sold, but at what type of discount and what if the borrower stopped paying.while there are a lot of posts on seller financing, some estimiate less than 1% of all transaction have seller financing and the ones that do are first position only with an average of 30% down payment - most of these are to people who do not have verifiable income.Thinking you will get conventional financing then seller financing will be uphill battle as the conventional lender most likely will not approve a 2nd mortgage for purchase.not trying to dissuade you, just wanted to provide some key insights so you do not spend 1000 hours chasing something that is impossible to find.

Quote from @Nicholas Dillon: Basic math on a napkin.When you cash out the equity, you borrow it from the bank.