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Creative Real Estate Financing

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Cody Wageman
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Seller Financing contract

Cody Wageman
Posted Mar 19 2023, 11:38

Hoping someone can help us with a potential opportunity that came our way. We have been under contract for a property and going back and forth with the seller on some terms and financing. Just yesterday he proposed potentially doing a seller financing option that sounds pretty good for both parties. The big concern is he says the contract is a “contract for deed”. We are not sure what that means or if that is the common way or only way to go about a seller financing option. The guy has been pretty good to work but we want to make sure this is potentially the right way to contract this if we go this route. 

Is there tax issues/ramifications if we do this? 

Is there issues if the seller for some reason has financial hardships or something that could adversely affect us?


this is definitely a new world to us so we are trying to get as much information as we can and we appreciate any information you can all provide. These forums have been super helpful and we’ve met some great people here.  Thank you for any information or guidance you can give us. 

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Replied Apr 24 2023, 09:45

Hey Cody,

A contract for deed is also known as a land contract or an installment sale. There is where you as the buyer do not receive the deed until you make the final payment through paying off the property, selling it, or refinancing it. With a contract for deed you receive all of the benefits (appreciation, cash flow, loan paydown) except tax benefits because the property is not actually in your name. You and the seller are both on title but as I states before, you do not get the deed until you make the final payment. Personally, I would choose to negotiate with the seller and do a regular seller financed deal. The deed would come to your name so you would actually own the property, the terms are outlined in a promissory note where you promise to pay them, and depending on your state, a mortgage or deed of trust would be created that shows you plan to pay them. If for whatever reason you can't pay the seller back, then the seller can foreclose on you (with however how many days you both agree upon) and take the property back. Look at Pace Morby as he is the creative finance mastermind! I hope this helps!

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Replied Apr 25 2023, 09:46

Best of luck! Let me know how the deal goes!

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Caden Wakim
  • Flipper/Rehabber
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Caden Wakim
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Replied Apr 25 2023, 10:26

I second @Jordan Alexander all the way!!!

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Cody Wageman
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Cody Wageman
Replied Apr 25 2023, 10:28

Hey @Jordan Alexander. Thanks for the input. We got the agreement changed so we own the property now. We didn’t like that option they originally offered and we got the regular financed deal like you mentioned here. If all goes well we officially close next week

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Replied Apr 25 2023, 10:35
Quote from @Cody Wageman:

Hey @Jordan Alexander. Thanks for the input. We got the agreement changed so we own the property now. We didn’t like that option they originally offered and we got the regular financed deal like you mentioned here. If all goes well we officially close next week


That's wonderful news Cody! So happy for you guys! I agree, going through a promissory and a mortgage or deed of trust is better as it gives security to you as the buyer since your name (or LLC) is on the deed. What are the terms of the deal?