Seller Financing Help!

8 Replies

We have two properties that we came across through our DM campaign.  Both would be great rentals to add to our portfolio.  Both sellers are motivated and open to seller financing.

The way we are planning to structure the deal:

20 year amortization period at 5% interest

2 year balloon

10% down payment.

This will be our first time using seller financing and we want to make sure it is all done correct.  Both sellers did not know about this option to sell their homes and are not familiar with the process.  We want to make sure it goes smooth for them and us.

What documents should we use to draw up the agreement?

How do we create the payment schedule with a 20 year amortization period at 5%?

Once we have the documents in place and signed do we close at a local title company similar to all the other deals we have closed?

Have a signed purchase agreement for the property with the terms that you want for the seller fiancing Then go to this site https://www.docmagic.com/.

You would then find an escrow company in your area to do title and closing ,like fidelity or first american title. 

@Account Closed

We have not yet signed a purchase and sale agreement for the property.  We are still in the negotiation phase.  But it is going well.  

So basically we would just outline the seller financing in the purchase and sale agreement?

How would we go about creating the schedule for payback?

If it's a free and clear property it's an installment sale

I would go to www.IRS.gov and download the installment sale info

If it has existing financing you're looking at a subject to and a note, wrap or installment sales contract in MO

It really depends on what kind of existing financing, FHA or non-FHA

I would see an attorney experienced in seller financing

Lastly regarding Dodd Frank I would sign a paper that helps the seller stating that 

"I have no intention of living in the residence and my intention is to rent it out to tenants"