Pros of selling with owner financing

[George P.]

What are the cons of selling with owner financing vs. Selling conventionally?
I want to try to market to long-term owners of rental properties and see if I can buy some with seller-financing.
Thanks

[Loc R.]

Pros of selling with seller financing:

1. Typically you can command top dollar and top interest rate.

2. You minimize your tax liability. If you sold a house that represented a $100K profit, you would owe taxes on the entire $100K profit. With financing you are taxed much lower. Of course if you are engaging in a 1031 exchange then you'd like to realize as much capital as possible.

3. You can close quickly (vs. selling to an FHA buyer). If you are flipping houses, it can be the difference between turning over a house (getting it under contract and closed) in 60-90 days vs. 90-120+ days.

4. If you are marketing to an older, DIY-type landlord, you can tell them that by financing the deal, they can essentially collect the same amount of money per month WITHOUT having to be a landlord.

5. If they have an underlying loan, wrapping the mortgage is a great way to make money with OPM.