I am in discussions to purchase a mobile home park and the seller told me he would be open to seller financing. I asked him what terms he would be looking for and this was his response?
Probably 41/2-5% with 15 to 20 percent down
Could someone give me some clarity as to what the 41/2-5% means?
Hello Josh! Actually, your question is fairly simple. That is usually the interest rate he would charge on his loan. I am surprised it's not a little higher to put him a little above conventional loan rate. The good thing about Owner Financing is much more negotiable than a conventional loan and is typically approved by the project and not your personal credit.
If I were you, I would try to get the down payment amount as low as you can and is what he can live with and feel comfortable about. It's also makes them more money and helps to spread their income out over the life of the loan balance. If you show on paper their benefits it can make that work in your favor as far as getting that loan. Good luck to you!
Agreed, look to get above 5 years in term length of when the loan is due in full. look for as long as possible on that side of things.
@Josh Skowyra the 41/2-5% means the Interest rate range he is looking for should be between 4 and 1/2 % to 5%.