I have a duplex going for 60k . The seller is willing to hold a note for 10k . I have 10k in the bank for the down payment. How do I structure the deal when the banks are only willing to use a maximum 3% sellers concession.
If the seller is willing to hold a note for $10K, that is not a concession, it is a second mortgage. Your title company can draw up the paperwork accordingly. Just make sure the language is correct in the purchase agreement.
@Stefano Mannino , one other comment. I hope you have more than $10K in the bank. You need a buffer to protect yourself against unexpected repairs or a vacancy. You don't want to have a furnace go out, lose your tenants and not be able to pay the mortgage. You could quickly lose not only your investment, but also destroy your credit and make it very difficult to rebuild.
Purchasing a property is only one step in the investing process. Make sure you understand operation expenses and how they effect you. Once you own a property, the investment doesn't stop there. I ask all of my first time investors to watch the revenue reserve movie. Find it and watch it. The principles are sound and they will help you hedge against your first deal being your last deal. Also, whenever creative financing is involved, get legal help. It's not worth the risk structuring something on your own unless you have a lot of experience. Even then, most experienced investors I know use legal help.
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