Seller Financing Prospects

[Greg Larson]

Hey BP,

What types of sellers do you believe are most apt to do seller financing?

I'm trying to put myself in situations where SF would be a win-win for both parties.

Thanks in advance for your advice!

[Marco Bario]

@Greg Larson - I'll add a few scenarios to @Jay Hinrichs' list:

- Tired landlords who want cash flow without tenants or property ownership.

- Sellers wanting to take advantage of IRS installment sale rules to defer and possibly minimize capital gains (IRS Publication 537). Look for owners who have a great deal of appreciation. Okay to mention the installment as a concept but follow that with a recommendation they speak with their tax advisor. Don't give tax advice. 

- Investors who understand note values and sell to you carrying both a 1st and a 2nd. They can sell the first after collecting a few payments at a higher value because it has more equity coverage, but hold the 2nd for cash flow.  

- Subject-to situations where the seller has a very low interest underlying loan. They can wrap the underlying paper with a higher rate and earn money on the spread.