Seller Finance Questions

[Jourdan Schmidt]

I am hoping to start my investing journey soon and doing research on different ways to acquire a property. I am struggling to find the difference between a traditional mortgage and seller finance. I heard seller finance is a way to get a property with little to no money upfront. I could come up with cash for a down payment, but what are the main pros and cons of seller finance for buying a property?

My goal is to buy a multifamily and house hack and self manage. I'm not fully prepared for that step yet which is why I'm looking into different ways to acquire.

Why would an investor want to front the money for an investment property for someone like myself?

What could make a deal more enticing to an investor to front money for me?

What are the benefits for using seller finance in this case against a traditional mortgage?

[Nicholas L.]

@Jourdan Schmidt

seller finance means there is a fully paid off property - no mortgages, liens, or HELOCs - and the seller, for whatever reason, may not want all of the proceeds up front.  so they're the bank.  they get monthly payments from you, the buyer, just like the bank would.  the payments consist of principal and interest and are paid out according to whatever terms you agree to.

seller finance deals are out there, but very tough to find - and they generally don't just sit on the MLS ripe for the taking. if you're looking to house hack, just use a mortgage. talk to lenders about lower down payment options if you're not doing that already. trying to find a house hack you can seller finance isn't impossible but is going to severely limit you in terms of the total available inventory.

hope this helps

happy to answer any more questions you have