How to aproach my landlord about offering seller financing

[Ben Skowronek]

Im doing a lease option (rent to own) with my landlord. I know he owns the home free and clear.  I want to ask him for seller financing. How should I approach him with my request for seller financing that looks attractive to him?

[Bill Exeter]

Originally posted by @Tommy F.:

You already have a lease option underway, the house is paid-off, and you're interested in going back to get seller financing? I wouldn't be surprised if your landlord is already planning a 1031 Exchange which eliminates seller financing. Depending on how long they've owned it, they may have a lot or all of the depreciation recapture tax hitting them plus cap gains which makes 1031 a likely strategy for the landlord. Just being candid with you. You never know until you ask. The worst thing you get is "no". Good luck.

Hi Tommy,

Seller financing does not eliminate the opportunity to structure a 1031 Exchange transaction.  It does make it more complicated, and many sellers may not be able to make it work, but it is possible.  The seller can put in cash out of his pocket to cover the seller carry back note (acting as the bank) so that the 1031 Exchange ends up with all cash.  The note could also be drafted in the Qualified Intermediary's name and then used toward the purchase of the replacement property or converted into cash through a sale of the note.  So, there are ways to do it, but it is more complicatd.