Selling primary residence- owner financing??

[Jim Stanley]

I am considering selling my primary residence near Denver so that I can use the equity to buy a cheaper residence in another state as well as some STR's.

BUT I have a REALLY good mortgage rate (2.5%, 30 fixed) and I hate to give that up.  Can/should I do seller financing?  How would that work and how do I make sure I get paid?  I currently owe about $320k and the house is worth about $750k.  My payment is $1800/month.

If I sold it for $750k, could I get, say 25% down ($188k) from the buyer plus a thirty year payment at, say, 4% ($2683/month)?  That would give me $883/month  cashflow on the payments, plus $188k in my pocket.  About $40k would go to a 10% downpayment on a 400k house for me leaving $148k to invest.  Please correct me if this is wrong or totally unfeasible.

Thanks!

[Steve K.]

@Jim Stanley when you sell using seller financing the title actually transfers to the buyer/ the new owner and you become the bank for the buyer, typically with a promissory note which allows you to regain title to the property if the buyer doesn't make their payments to you. Since you have an existing mortgage the sale would trigger the "due on sale clause" i.e. your mortgage would need to be paid off at closing. A better way to access your trapped equity may be to pull a Home Equity Line of Credit (HELOC) and use that money to invest in other properties.