Seller Financing: what to ask the seller?

[Valerie S.]

Hi everyone, I'm new to real estate investing. I'm looking in to deals that offer seller financing and curious what your top questions would be for the seller when making the deal?

[Tom S.]

@Valerie S.  I find there are two parts of it: the numbers side, and everything is negotiable.  I typically start with 10% down, a market interest rate amortized over 30 years,  and a 7 year balloon, and go from there.  I definitely prefer not to pay more than the appraised value (you should pay for an appraisal).

The other part is the property: issues with it, rehab needed, tenants paying?  You should talk to the tenants as part of the due diligence process.  You want to make sure the owner isn't using seller financing to dump a crappy property onto a newbie.  Don't let their problems become your problems.

Hope that helps!