My First Creative Owner Financing...Need some Guidance

[Alexis Zion]

Hi All

I ran across a property the other day  that has been on the market for about 400 days. 

I have been to the property its in an okay area.  It was remodeled from a small store to residential units.  Plus seperate units on the back

 The owner is willing to finance the whole amount. Which is what is making me interested. 

I was thinking of proposing the following

the first 5 years principle only, with a refi-at the end/or not... I would love to see if he would go longer..What do you think?

I would like to ask for either money off or a credit for some needed work?

Who would be the company/custodian who would receive/disperse the "mortgage" payments?

Any other things I am not thinking about?

Any other ideas on how I could structure this?

Thanks

Alexis 

[Bill Gulley]

Check the zoning! There use to be neighborhood grocery stores in older sections of many towns/cities and many have been converted to a residence. The issue can be the end loan financing when you have that balloon payment! Most likely it will be seen by a lender as a commercial structure with a residential use, that effects marketability. Make sure you can refinance it conventionally before you do a seller financed deal.

I've posted tons on seller financing, so you need to dig some, sorry, but there is too much to go into in a forum post.

Google "Loan Servicing Company" you'll find a bunch. As a buyer try and keep from doing any escrows of taxes and insurance.

His age may have something to do with how long he carries it, ask for ten years and you can negotiate down to 7 or 5, certainly don't do three years unless you're certain you'd have 40% equity on this one, I suspect it won't appraise well due to comps, if your lender would even do it at all.

You really need to get with a bank or CU about a portfolio loan and see what their guidelines are, then devise the SF loan to meet those requirements by the time your balloon is due, and start refinancing about 6 months before the loan is due, that won't be an easy loan to do being a conversion......generally they are tuff without good comps. Might want to think on this deal....   :)