Sanity Check – My first seller financing to my renter
I moved from my primary residence and rented it out while I moved away for my job. The renter wants to buy it, but the bank wants 20% down and he can’t afford that until next year. I’m thinking it may be a good option to offer him seller financing as I can pay off the home and then collect his mortgage payment instead of rent. The home is worth about $460k and rents for $2200 (minus property mgmt. @10%). If I sold to him at $460k and he puts 10% down and pays me say 8%, he can buy it now, I avoid a realtor and all the expenses on the rental. I would collect ~$3000 per month and he’d likely refinance next year and pay me off. If he doesn’t, I’m getting 8% on my money which to me seems reasonable.
I’ve never done this before so hoping someone can sanity check me here and let me where my blind sides are. Seems like a good deal for both sides.
Thanks!
Greg