Seller financing Exit Strategies

[John James]

Can anyone talk about the exit strategies with seller financing and going to a bank? How do i know a bank will give me a loan? What if i acquire 4 or 5 properties this year and 5 years later I have to give balloon payments to all these sellers? Will i be able to get 5 different loans from banks?

[Christine Mulkins]

Work with the sellers on the terms of the financing. Maybe you can work out longer terms, ie 10-30 years? My husband and I just closed on 3 seller financing transactions. The fun thing about is that you can make the terms whatever you and the seller agree To. For example, maybe the seller wants the security of the income stream for 20 years but you want the chance to sell Or refi out of the deal before then - just in case things change for you. An idea is to put in a prepayment penalty clause that states that you will pay the seller’s capital gains liability if you want to pay the seller off before the expiration of the terms. Seller financing is a great tool to get into deals and make it a win win for both parties involved.