owner finance

[Cristhian Diaz]

Hey BP!

I have a customer that wants to do owner financing. I have a standard contract which has the blank line to fill in terms. If my client says that he prefers his attorney to make a specific financing contract with our agreed terms, how would I go from there? My contract still needed for my due diligence?

Thanks. 

[Tom S.]

@Cristhian Diaz

Personally I don't think it's a great deal.  You said you have to negotiate to get to $265k, what the property is worth.  So you're not getting any discount but rather paying full retail. BTW - make sure you get an appraisal to check that it's truly worth $265k.

Then on the rent side you really should be at $2k rent for a $1k mortgage payment, to cover all the extras: vacancy, evictions, capital expenses, etc.  Even the 1k mortgage payment is a stretch, as you're using a 2% rate to get that.

- Tom