Owner Finance buyer is Investor

Buying & Selling Real Estate
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Owner Finance buyer is Investor

Gad Amit
Member since 2019 · 12 posts · 0 votes

Hello, Please help I do need advice.

I own a property in Florida for the last 6 years,

Now I want to sell it with Owner Finance (Zillow say it worth about 130K)

I have nice agent that just got offer. Terms are:  6% Interest rate,  10K down and I think 30 years loan and 3 years lock into the loan with me.

I was thinking it is sound OK but I just found out I have an investor as a buyer. 

A. I am NOT helping some guy that need help…. And 

B. Is it cool? I am missing something. Why investor is doing that?

I'm new into OF, Please let me know what you think?

Thank G

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Marc Winter
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
6y

@Gad Amit (is that a curse?  LOL)  IMHO, anything less than 20% dp for seller financing would not be worth it.  In your scenario, I'd rather offer a lease with an option to purchase.

Rationale:  if/when things go sideways, that $10k won't go too far to achieve a foreclosure and repairs.  Much simpler and less expensive to evict.  Good luck!

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  • Jermaine Chad Ingram
    Real Estate Agent · Fort Pierce, FL · Member since 2019 · 257 posts · 105 votes
    6y

    @Gad Amit why do you care?

    0Reply
  • Gad Amit
    OP
    Member since 2019 · 12 posts · 0 votes
    6y

    I sure hoped to help a person with need... otherwise I don't

    BUT the question is, if I miss something?

    0Reply
  • Jermaine Chad Ingram
    Real Estate Agent · Fort Pierce, FL · Member since 2019 · 257 posts · 105 votes
    6y

    @Gad Amit you didn’t miss anything. You’re offering a great deal.

    You could restrict the deed to keep the house affordable but that may kill this deal

    0Reply
  • Marc Winter
    Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    @Gad Amit (is that a curse?  LOL)  IMHO, anything less than 20% dp for seller financing would not be worth it.  In your scenario, I'd rather offer a lease with an option to purchase.

    Rationale:  if/when things go sideways, that $10k won't go too far to achieve a foreclosure and repairs.  Much simpler and less expensive to evict.  Good luck!

    4Reply
  • Gad Amit
    OP
    Member since 2019 · 12 posts · 0 votes
    6y

    Marc, (it is NOT a curse!!! it is my real and only name..."Gad" is from the bible... right)

    But more seriously, 10K should be enough if Worst come to worst... I hope  the place is in a very good order(for now)... this is investor hope he want to keep is good name... how costly can foreclosure be... Just thinking...

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  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    6y

    @Gad Amit, 10k barely covers your closing costs.

    As far as the investor goes:  it looks minus to me on day 1.  But investor might want it due to other properties in the area, Airbnb, or some other play.  You really don’t know.

    Good luck!

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y

    You'll basically have a renter you'll have to foreclose on instead of evict.

    Wait, you would net more at a renter move--in than a low down SF closing with a realtor.  

    And now you have tax complications. Whose gonna issue your buyer their annual 1098?  Installment sales can be a pita for your 1040 as well.

    I never accept investors on my SF deals and I only do them FSBO when I do. Hope your buyer selects good tenants!

    0Reply
  • Gad Amit
    OP
    Member since 2019 · 12 posts · 0 votes
    6y

    Thanks so much for your help it is great,

    I asked my agent to request 15K down. 

    Yes I risk the deal, but from what I get so far it is reducing my risk significantly...

    Thanks again

    Gad

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y
    Originally posted by @Gad Amit:

    I asked my agent to request 15K down. 

    If you actually want 15, request 20.  A bank would require 26. For a reason.  

    Vet this buyer.  A known quality landlord with reserves?  New, know nothing, broke?  See if they own anything else on your county assessors website. 

    Good luck and keep us posted.

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    An investor is buying it as they know they can make money off your house. 

    IMO it is in your best interest to list it on the open market if it isnt. And, talk to your accountant re seller financing. 

    Good luck

    0Reply
  • Gad Amit
    OP
    Member since 2019 · 12 posts · 0 votes
    6y

    I'm awaiting the answer... after requesting 15K for the 130K value... 

    I'll let all know

    Thanks for your help

    Gad

    0Reply
  • Gad Amit
    OP
    Member since 2019 · 12 posts · 0 votes
    6y

    Just to let you know that this deal went side-way... buyer lost is deposit NOT too much but I did try to learn the investor numbers on my property from investor perspective found that numbers are NOT RIGHT which mean that he should NOT buy to begin with since HOA was too high... my agent said that he want the property to himself... so I didn't say anything but now we all know the END-STORY here.

    Actually I should ask a new question how to fund real buyer that need Owner Finance? (OF) 

    OF is a Win Win from what I can see but why the MLS is so limited and not allow you to filter OF deals (some places I know you can do it but NOT in all places). Bottom line I understand now that it is NOT easy to find buyer for OF... I think that most people will NOT know about that option and I'm sure that OF tools to find home with OF can be great appreciated by both side seller and buyer.

    G Amit

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