Seller Financing vs Bank Financing

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I'm new to the forum and real estate investing. I have a pretty decent off market deal right now that's currently in probate. It is a condo and the purchase price is $80,000. The ARV is $120,000-$130,000 with rehab costing no more than $15,000. My intention is to keep it as a rental property so my question to you is what will be the better financing option.

With this property I do have a seller financing option. He wants 50% down at an interest rate of 2.87% for 9 years. However I do plan on living in the property temporarily so if I use traditional financing I can get into the property for as little as 3% down ($2400 compared to $40,000) with the current interest rates at around 4.75% for 30 years. I know that for CoC the bank financing option is the better route but I'm wondering if there are other factors I should be considering when deciding which way to go.

What would you do in this situation and why?

Thank you!,


@Mark E Orensteen Congrats on  finding this investment opportunity. If you plan to continue investing then the strategy should entail to use OPM (Other People Money). In other words, put less of your own cash and take loan for the rest. You can also try to negotiate with the seller to lower the down-payment. If let's say he agrees to make it 10%, then you may want to reconsider. However if you plan to buy more properties keep the cash to invest in them.