Seller Financing Vs Conventional for first time rental w/caveat

[Jonathan Davis]

BP, I have a great opportunity to purchase a home being sold by my in laws.  They are pricing the home well below market value if it's sold within the family.  I'm a new RE investor and feel like this would be a great first property to add to my buy and hold portfolio.  

My question is, would it be advantageous for me to convince them to Seller Finance the home to me?  That way I'll still have lots of opportunity to purchase future investment properties in the near future via conventional financing? I've heard frequently on the podcast about investors having difficulty obtaining conventional financing after purchasing their first several investment properties, therefore, I figured avoiding a bank for my first property might provide me with additional conventional financing availability in the future. 

Thanks for helping to get this newbie going!

[Ashley St. Gelais]

Hey @Jonathan Davis!

Congrats on researching  a new possibility!

When it comes time for you to buy your next property, you'll have to report to the bank any real estate owned and any liens against the property.

One benefit of owner financing for you, is that perhaps your family will owner finance it to you with little to no money down. Which means more money in your pocket for the next property.

Keep in mind that some traditional financing loans require that you have 2 years rental history as a landlord.

So be sure to research your options with a local lender before you decide to go with owner financing or not. You'll want to know any specifics with your lender that may impact your decision to go one way or another.

Please let me know if you have any other questions! And as always, I'd love to connect on here. : )

Ashley