how does owner financing work?

[Account Closed]

how do i explain to the seller how much money they make from it?

do i still buy it at 70%?

[Caleb Heimsoth]

Jeff Jerma if I understand you right, you would simply look at the terms of the loan, meaning amount, interest rate and amortization schedule. Depending on those things, that will give you your answer.

For example, assuming the seller has no debt on the property, if they sell it for 100k, they receive 100k, minus costs and commissions.

Let’s say instead they owner finance it at 10 percent down, at a rate of 8 percent for 10 years. If they held onto that for the term of that loan they’d make a total of 131k.

Hope this helps