Land contract interest rate?

6 Replies

How much should I charge for interest rate on a land contract?

I am selling  a property for $55k with $5k down. I am thinking for 8% interest.

I do not make mortgage payments but my partner does hold a $25k mortgage that will be paid off when the buyer can get financing.

whatever is agreeable. I have bought investment properties on land contract from 0% to 5% but it sounds like you are selling to an owner occupant. If that is the case I would have a lawyer assist you as those types of transactions hold more regulations with a owner occupant buyer.

I recently bought one I'm holding as a rental and my interest rate is 3%.

Check Dodd Frank issues by searching here on BP, also search Contract For Deed, then search Predatory Lending which applies even if Dodd Frank doesn't in your state. CFDs are not a good way to go now, but see a local attorney.

State usury laws may apply to your transaction as well, 7 to 10 % is a customary range, but interest is not just pulled out of the air, it is to reflect risk and you have less than 10% down, 10% might be fair.

This is not a DIY matter as it was years ago! Good luck :)

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

Originally posted by Billy B.:

How much should I charge for interest rate on a land contract?

I am selling  a property for $55k with $5k down. I am thinking for 8% interest.

I do not make mortgage payments but my partner does hold a $25k mortgage that will be paid off when the buyer can get financing.

 I would go as high as they let you.  How bad do they want it?

Medium logo 5545John Horner, Core Developments LLC | [email protected] | 614‑664‑3174 | http://johnbuyshousesohio.com/