Determining Loan Terms
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...
