Seller Financing

[Chantelle P.]

Hi, I'm a newer investor from Orange County CA with a couple of SFR's and I'm looking to sell one of them. My current renter has been there for a few years, has been an excellent renter and would like to purchase the house. However, he just switched jobs (got a promoted position) and is having a hard time getting financing. I was thinking about the possibility of offering seller financing but I still have a mortgage on the house...I do have about 290K in equity though and think we both benefit if I'm making close to 5% interest and he's able to purchase the house.

That said, I've heard that seller financing can be tricky if the seller still has a mortgage. I plan to hire an attorney to help but was hoping for some advice here also. Thanks! 

[Brian Gibbons]

Originally posted by @Chantelle P.:

Hi, I'm a newer investor from Orange County CA with a couple of SFR's and I'm looking to sell one of them. My current renter has been there for a few years, has been an excellent renter and would like to purchase the house. However, he just switched jobs (got a promoted position) and is having a hard time getting financing. I was thinking about the possibility of offering seller financing but I still have a mortgage on the house...I do have about 290K in equity though and think we both benefit if I'm making close to 5% interest and he's able to purchase the house.

That said, I've heard that seller financing can be tricky if the seller still has a mortgage. I plan to hire an attorney to help but was hoping for some advice here also. Thanks! 

 Chantelle

 If you want to help him buy it the best way is to fill out a 1003 mortgage application which is a federal form you can find on the Internet 

 Then find a mortgage broker to look it over 

 I would march him down to the bank and open up a savings account to save up 3 to 5% for a down payment 

Wells Fargo just created a 5% down plan which might be better than the FHA program

Charge him market rent and give him a right of first refusal which protects him for a period of time.

If he needs help creating a stronger FICO score, have him open up a secured loan with the bank for a thousand dollars, and apply for an installment loan that's  secured

Also have him open up a secured Visa card 

If he can create new positive credit references, it'll help his ability to get a mortgage.

I coach seller financing so if I can help you let me know