Puyallup, WA 98374 · Member since 2018 · 11 posts · 5 votes
I met a couple who bought a 2bd/1bth in Washington near a great area for $104k. It was the property next to their primary residency and they got it just to knock down trees so they could have a better view of the mountains. This was a year ago and they haven't got a tenant.
They're now selling it and their primary residency and I'm meeting with them about buying it and am going to present seller finance as one of the options.
I want to make sure I hit all the reasons why it would benefit them. What should I include on that list?
@Evan Mack it really depends on why the sellers have decided to sell in the first place.
If they need the cash to buy a new place seller finance may not be their best option.
If they are just tired of the property and have high equity perhaps they could take monthly installments while they are still working and then receive a balloon payment in five years after they retire to reduce the tax bill.
I'm not an accountant so they should consult theirs to see if that works.
They're just downsizing to a single story home now that their kids are all gone and they're preparing for retirement. It sounds like they have a lot of equity in their primary residence so I'll definitely be discussing the tax implications and encouraging them to discuss with their accountant.
@evan
Seller financing will help with capital gains tax and depreciation recapture.
If they choose seller financing they will be earning interest on what they would’ve paid on income tax and could get a better return than other investments like a CD.
Could ask, “Would you be interested in carrying financing if you continued to get a check every month without having to deal with the maintenance/repairs and finding a tenant?”
“Is it the down payment you want or are you looking to have that monthly payment? “
*These are all taken from bigger pockets real estate podcasts .