I think I understand the benefits to the buyer/investor when it comes to using seller financing on a deal. But, could you guys list the benefits on the seller's side to providing seller financing?
I also would like to hear some examples of how you were able to use seller financing in deals you have done, why you chose to do it that way, and what the seller's reasons were for agreeing to provide financing for the deal.
If the seller would pay a huge tax burden, seller financing can reduce it by spreading it out over years instead of the one-time hit. It also can provide income without too much risk as long as they've received a sizable down payment and properly filed lien on the property. The buyer takes over all maintenance, repair issues but the seller can get the home back if the seller doesn't pay. In addition, it can be of great value with a hard-to-sell home, like on a busy street corner or backing to a shopping mall or something as it will attract buyers who may not qualify for traditional financing so they may be more willing to purchase at seller's price if seller finances.
We are considering a double wide mobile home on several acres that is currently bank owned. We “think” we can get it at a price equal to slightly less than the average land cost. We know that if we get it, most people cannot get financing on a MH, so we will offer it as for sale by owner with owner financing.
We think we can get a large chunk of our money back as a down payment and then the 15 year note will be close to what we could rent it for. But the best benefit is that the new owners feel a sense of ownership and they are responsible for maintenance.
If they pay it for 15 years, we would feel like we hit a home run for sure.
@Lynn M. Nailed it..
Thanks guys. The thought was crossing my mind as I heard of a guy locally who is looking to "cash out" of his properties as he is older and wants to get out.
So, my thought was to see if seller financing would be an option for him if I was to take over several of his properties. I was thinking of it being a way for me to gain more properties with what I have saved for a downpayment than just using such a big chunk of that savings for a 20% downpayment on one place.
The advantage to the seller in my mind was tax savings, and getting several properties liquidated at a time.
He has back taxes owed on the one property he currently has listed. So, not sure if he's hard up for money or what happened there. I don't know this guy, just what I found out through the listing agent. Sounds like he's in his 80s and his son may be looking to cash out of his properties also.
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