Selling a portfolio owner financed

6 Replies

I’m 60-90 days out from selling my current portfolio rehabbed on the retail market as individual units. A lot of my properties are duplexes in the Lakewood market in Cleveland Ohio. I have 5 properties and two contracts

I’m potentially considering seller financing as a package however I see a lot of risks with this. But maybe I’m over analyzing the risks....

Has anyone sold a portfolio seller financed? I’d obviously much prefer cash. Part of my challenge I see if I accept a seller financed offer is my capital is tied up and I’m stuck at a whatever interest rate I locked in. As a flipper Capital is the life blood of my business.

Thoughts appreciated

@Victor Vella , what are you considering it? Are you worried that your properties won't sell? Do you have a viable offer from someone who's asking for owner financing?

I don't know your market, but if the properties are priced right, they'll sell.

Oh I know, I just get anxious as **** and I want to unlock some capital to keep moving.

But my concern is ting up the capital to reallocate.  Even if i get $250,000 down and finance the rest at 10% as a flipper I can do 15-33% on one turn. If I turn it twice a year it makes sense to be patient. Where I'm running into the issue is the contracts I will need to use hard money which it serves a purpose  - but I guess its just an expense.

Victor, understand the idea of selling your properties as a package with owner financing. Makes for a unique offering for a buyer. In this market though I don’t think you need to offer that or take the risk.

There’s almost no inventory especially in Lakewood. You are going to have a lot more potential buyers for individual two families (who bring their own financing) + will get a much better price than what you’re going to have to offer in a package deal to make it attractive enough. The only thing that offering the package is going to do is slow you down....if you do get a bite on the package, you’re taking them all off the market while you determine whether or not the buyer is the real deal. 

Also keep in mind that in Lakewood, your ideal buyer is the owner occupant. Most are buying for a nice place to live with return as a secondary consideration which is what drives prices up in Lakewood. 

Wrote an offer on a Lakewood duplex a couple of weeks ago that was small (about 900 sq ft per unit vs the standard 1100 or so) but priced correctly.   There were 4 other offers and I’m sure it sold for well over ask....all offers came in the first weekend it was available for showing.  Yours will sell quickly if in decent shape and priced reasonably.

Originally posted by @Victor Vella :

I’m 60-90 days out from selling my current portfolio rehabbed on the retail market as individual units. A lot of my properties are duplexes in the Lakewood market in Cleveland Ohio. I have 5 properties and two contracts

I’m potentially considering seller financing as a package however I see a lot of risks with this. But maybe I’m over analyzing the risks....

Has anyone sold a portfolio seller financed? I’d obviously much prefer cash. Part of my challenge I see if I accept a seller financed offer is my capital is tied up and I’m stuck at a whatever interest rate I locked in. As a flipper Capital is the life blood of my business.

Thoughts appreciated

I see no reason why you'd want to hold the paper.