Is Owner Financing a Good Option ???

Question

Hello BP !!!

I just came across a deal and I am thought abut seller financing but this is something I have never done before and I am a bit confused about.

This is the situation, this a condo that was bough back in 1995, the loan was under one person name and the title under another. The person on the title is a non resident alien and she recently arrived to the US to find out the property is in pre foreclosure due to the other person not paying the loan. The current balance on that loan is about 30K and the max I can pay is about 120k for the condo.

I am currently working on a flip and I was thinking if owner financing would be a good idea, but I would not know how to structure it and how to take care of the 30k loan balance. Any suggestions or advice on how to approach this deal and what a good owner finance structure would look like would be very much appreciated. If owner finance is not a good option please let me know as well.

Thank you all !!!

Ehsan Rishat · Answer

@Jose Trujillo You can directly negotiate with the owner to purchase the property. If the owner is behind by 30k on the payments you can offer 30k + a certain amount of money to ease the owner's suffering. These distressed sellers are likely to sell in these situations because you would be saving their credit by keeping their property from being foreclosed. This is not a great option for owner financing because, as you mentioned earlier, the 30k balance will still have to be taken care of.

Good Luck!

Jaysen Medhurst · Answer

@Jose Trujillo, I'm not sure what the advantage of owner financing is or even how you'd do it. The owner will have to pay off the balance at closing no matter what. Offer $40k cash for the place, you're throwing the owner a lifeline.