New to Real Estate · San Diego · Member since 2021 · 4 posts · 1 vote
Hello BP Community I've recently found a owner who is willing to do seller financing, any one with good or bad experience with this method of financing in San Diego?
Seller financing is not really location specific. Your biggest risk once you have negotiated the deal with SF is that the person has note that is called, but I would just call their mortgage servicer if they have a note and see what their policy is with regards to due on sale clauses after title is transferred on properties.
The next thing I would be concerned about is being able to refi balloons. If you are going to have your deal be a 3 year balloon on a 25 year am at 5%, with 0 down, your loan is only 7% paid off by the third year and you won't be able to find a traditional lender to do a 93% LTV loan. If you do a balloon, you need to make sure you have a plan for your refi.
Seller financing is not really location specific. Your biggest risk once you have negotiated the deal with SF is that the person has note that is called, but I would just call their mortgage servicer if they have a note and see what their policy is with regards to due on sale clauses after title is transferred on properties.
The next thing I would be concerned about is being able to refi balloons. If you are going to have your deal be a 3 year balloon on a 25 year am at 5%, with 0 down, your loan is only 7% paid off by the third year and you won't be able to find a traditional lender to do a 93% LTV loan. If you do a balloon, you need to make sure you have a plan for your refi.
Seller financing is not really location specific. Your biggest risk once you have negotiated the deal with SF is that the person has note that is called, but I would just call their mortgage servicer if they have a note and see what their policy is with regards to due on sale clauses after title is transferred on properties.
The next thing I would be concerned about is being able to refi balloons. If you are going to have your deal be a 3 year balloon on a 25 year am at 5%, with 0 down, your loan is only 7% paid off by the third year and you won't be able to find a traditional lender to do a 93% LTV loan. If you do a balloon, you need to make sure you have a plan for your refi.
Nathan, this is a kick *** response about financing strategy.
Sebastian: seller financing is an incredible resource for both the buyer and the seller when negotiated correctly. If you've never negotiated this kind of deal, I'd encourage you to find someone who has. The price, the rate, the payment schedule, the down payment... everything is flexible and makes the negotiation fun for both sides. It would also be very easy for either side to feel taken advantage of or, even worse, disrespected.
By excluding bank financing, the deal is very pliable.
@Sebastian Johnson I made about 200 calls to find someone willing to do a seller carry back. I would suggest you finance what you can afford to and carry back the rest. Happy to chat through strategies to help!
Hi @Sebastian Johnson as mentioned above, seller finance works in every market and can be the best way to complete a transaction for both buyer and seller. It's really all about what terms you come up with and as you get more into seller finance you'll realize there are a lot of finer points and intricacies with structuring financing with the seller.
Typically, just like any other type of sale, the seller is unreasonable. If they want better terms than what you can get with a bank don't bother.
I just posted more details about pitching and structuring seller finance deals here if you want more to know more of the nitty gritty