Needing advice/options for a seller-financed SFR

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Hi, all - I’m working toward my first deal, and I could use your help with options to acquire a single-family home that a friend of mine owns. He wants to seller-finance it for $170K at current market rates without any down payment. The house rents for $850/mo, and I think I could push it to $950, give or take - but the debt payments (30-year loan at 4.75 or 5%) and taxes and insurance would take up all of that, leaving nothing for renovations.

One alternative I’ve pondered would be to secure it and then seller-finance it to an owner-occupant. But I’m concerned that my friend may want me to pay off the house in 5-10 years, so I’d have to pass that along to a new buyer.

Are there other options that come to mind? I'm sure there are things I haven't thought of, and I'd like to create a win-win for me and my friend.


One of the nice things about seller financing is that sellers and buyers have broad flexibility in creating a win-win.

Many seller financing sales use 5-10 year balloons so if your friend, the seller, wants a structure where he gets paid off in a time frame less than 30yrs, you certainly have the option to buy it with a balloon loan from the seller and than sell it with a baloon loan to a buyer.   You'd want the interest rate on the 2nd loan (Wrap Loan) to be higher than the interest you are paying the seller to ensure you are making some interest income via the spread of some kind.

You can also ask for some kind of downpayment.   For a $170K house, something like $10K-$15K would be typical

I may not have all the info...