Cape Coral, FL · Member since 2008 · 469 posts · 32 votes
... be a waste of time(yours and agents')? I'm not using the MLS now to search for deals but I know many investors use it so I'm just wondering how viable a source it is for seller financing. I'm guessing as viable as any but to use it exclusively for this purpose might be a waste of time unless one had a relationship with an agent that would invite this strategy. Any input on this? Thanks
From my experience 99% of Realtors don't understand seller financing. The only way they understand security and are able to pitch the benefits to a seller are with high interest rates and high downs. Very few listings include seller financing even when it would be the best structure for the seller.
Most often, when we see seller financing the SF terms are horrible or the listing agent is using it to attract buyers when the seller is upside down and the only way to move the property is to offer it to a marginal buyer at above market.
Finally, you will have to come up with cash to pay for commissions. This means that you will always need a minimum of 10% down to cover seller's closing costs.
If you're talking about larger multi's that require commercial financing, that's another story entirely.
You should absolutely be monitoring the MLS to get a sense of the market and there are deals on it. If your only option for acquiring properties is SF, you should be focusing on getting to sellers directly.
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
10y
You can set it up as an auto search. At the end of the day seller financing is still going to be rare. Even more rare will be a well priced property with favorable seller financing terms. It's always a give take.
Investor · New Waterford, OH · Member since 2015 · 81 posts · 14 votes
10y
I've found in most of my conversations that unless the seller explicitly tells them that they're willing to carry, it's difficult to find out. The agents I've spoken with tend to either not understand it or they're just unwilling to ask the seller. It's unfortunate.
However, maybe 10% of the ones you ask would know/understand and maybe 10% of those would be willing and able to get you a seller financed deal. So it may take you 100 deals to look through to find seller financing. Maybe it's less, maybe it's more.
I would think (theorizing here a bit) that if you're able to find a deal you'd really like to have and talk to the seller and find out their equity position, you might be able to talk them into it because of the tax benefits and the ability for them to get more money than being bought outright. Maybe they've held the property long enough that it's paid off and they're just wanting out, but don't want to give up the monthly income or take the tax hit on a fully depreciated property. Could be a good opportunity then.