I have a lot recently about purchases using 100%, no money down seller financing, anyone with recent experience doing this? How does a deal like that structure in a loan / agreement contract?
@Daniel Halsted * heard a lot
I would say that the saying "if it sounds too good to be true, it probably is" would apply to this. I have done a few seller financing purchases and so far they have worked out well. In my case there was an industrial property in Seattle that was run down and difficult to finance so I suggested seller financing. On the second one I bought an apartment building in the Phoenix metro market last year. It had an unstable tenant base with vacancies and non paying tenants. This was also hard to finance, so I suggested seller financing. Both properties were purchased at a discount. With the deal you are talking about, it seems like the only reason they would sell it with zero down is because it is overpriced.
Yes that’s what my comps suggest, it’s over priced and needing updates and minor repairs. Working with the seller to settle on a win win price and have seen where others have used seller financing to entice the seller with the monthly cash flow of a mortgage payment vs the lump sum at closing and capital gains taxes.
I’m very new to investing and navigating my way slowly, exploring options and just trying to figure it all out.
Good idea to be methodical about this. Don't always look for the white elephant investment. I personally look at a lot of properties and can't really see reasoning to go with seller financing too often. I have done just a few over the years. If downpayment is a problem, I can see it, but usually (unless it is overpriced) the seller wants the buyer to be committed by having some skin in the game. On my deals I put between 20% and 35% down. This gave the sellers more incentive to discount the sale prices.
Thank you for your comments and advise, much appreciated.