Determining Loan Terms

[J Scott]

Hey folks,

I just bought my first MH, and I'm getting ready to do the rehab and marketing for a buyer.

My question is, how do determine the optimal terms of the note I will negotiate with the buyer? And how should I negotiate it?

The various terms I'll need to nail down are:

- Purchase Price
- Interest Rate
- Number of Payments
- Monthly Payment

I assume the Purchase Price is determined by the seller upfront. And I assume the monthly payments are pretty much dictated by what the buyer can pay (assuming it meets a minimum required to get your principal back in 12-18 months).

So, how do you determine the interest rate and the number of payments?

Do I just pick an interest rate and calculate the number of payments from that? If so, what's a reasonable rate?

Any advice on how you set your terms is appreciated! Thanks...