I am a newbie and asking my opinion on seller financing with balloon payment.
I have the option of purchasing a already rented Condo with seller financing, here are the details:
3 years with balloon payment
Is this a good option?
Can’t get bank financing at this time.
Do you already have an idea for your exit strategy for the balloon payment? Are you certain that between now and before the 3 more balloon payment is due that your circumstances will change and you will be able to get bank financing?
- Lucas Duce
The terms are customary for owner financing except I would ask for 5 yr balloon for the loan to be compliant with federal regulations. It's better for both.
@Nicola Archer - I would add in the ability for a 1-2 year extension if you aren't able to come up with the financing.
Yes, I am pretty much certain my situation show change in 3 years but it not can I refinance thru private lender
Roman and Michael have some good advice. Have you run the numbers through a BP calculator or even your own calculator to make sure the numbers work? With having that high down payment and also high interest rate, I'm curious what you're looking for cash flow after potentially having to hold that property for 5-7 years before refinancing.
- Lucas Duce