Owner financing (HELP!)

8 Replies

Hey guys, so tomorrow I have a meeting with a young lady who's father owned a 4-plex and recently died. She apparently doesn't want to deal with the property and I was told she's is willing to sell, So I called her up and she agreed to meet me for coffee tomorrow. I'm going to try and acquire this property through seller financing since at the moment I wont qualify for a 300,000.00 loan, I just left a real estate attorney in my area a voicemail waiting on his call to see if he can help with the process (if she agrees). Has anyone out there done this before, any tips what should I tell her to help close the deal. Please advise greatly appreciated.

Hi @Jose Alonso ,

I dont have nearly as much experience as many others on the website, but thought id add in thoughts..

I actually just closed on a owner financed deal last month, a two-family property. If you are looking to persuade her do owner financing as opposed to straight out selling it, I would mention these couple things..

1) She will receive a nice monthly income for whatever length of time decided.. which includes quite a lot of interest income over the length of the loan. 


2) You typically close on the property much faster, with less fees and possible tax savings from not having such a big capital gain in one year.

Im sure there are much more, but these two jump out at me... In my case, the landlord was getting to be in his 70s+ and no longer wanted to do it.. so it worked out for him because he still receives a monthly income from me every month, without having to do anything with the property..

Hope this helps!


There is no tax savings for this seller as her basis is today's market value from the inheritance or what she sells at. Get a seller's attorney involved and they will want to know what your down payment will be, like 10% or 20% down. 

You do seller financing after you find out what the seller really needs, solve their problem. 

There are too many threads about seller financing on here to rehash everything from the start. So begin reading and when you have specific questions, post them up. Good luck :)

Also, remember all parts of the owner financing is negotiable.

Try to have 3 different options to present to her. For example, 1. Full purchase price with a market interest rate, 2. lower purchase price with a higher interest rate and 3. above asking price with a below market interest rate. 

You can also include an option for a cash purchase. Typically this would be 75% LTV since that should be easy to get financed for and lead with that. In most cases that cash offer will be too low and then you roll right into the sales pitch for owner financing.

Hey @Bill Gulley thanks for the input, yea been reading up on it. So I spoke to the potential seller, and she told me to give her a couple a weeks she wants to let things sit to make sure she doesn't regret any decision she makes. S I will follow up with her in 3 weeks. Even though she told me if she does decide to sell she will call me first. Anyways again thanks for help.

Sincerely Jose Alonso.

Originally posted by @Jose Alonso :

Hey @Drew Castleberry thanks for the input men. Awesome advice will deffinetly put to use when the situation presents itself.


 I lost a long post to this early. But 2 and 3 have issues you need to be aware of. Financing does not add value to the real estate. Don't jack up a price and compensate with other terms! Next, you may have usury laws concerning interest rates and you will have tax matters with imputed rates if the rate falls below minimums to be charged.

Usually, you'll find that by solving the seller's problem and giving them a reliable income stream will never require you to cloud the sellers mind having them pick options to take. That's pretty much guru stuff, besides, if you have leeway on a deal, negotiate your best deal and bend from there, just try to solve the seller's problem and when that is done, decide if you can go there. 

The rest of my post was a consolidated list of do's don't's but you can find them in my posts as well. Good luck :)