Seller options for private sale of SFH finance options ??

Question

What would be option for financing I could suggest to a seller of a single family home.

Owner (seller) contacted me and want to sell us their house, the owner is ill and son has lived with him for past 8 years, They would like to be able to rent the home from us for the next 2 years after we buy it. this would be private sale no Realtor fees.

What is a good way to finance with out a bank, I have cash and could pay about 2/3 of cost of house upfront and do some type of arrangement for payment on balance. Credit is no issue just trying to avoid bank involvement, if I can suggest option to seller he may consider.

Deanna McCormick · Answer

Correction the 175K line of credit I have is a interest only loan at like 4.75% I typed it wrong..

Deanna McCormick · Answer

Thanks for your suggestion, I had considered a contract for deed but was concerned with whom would be on the CFD if the seller (person that is ill) is only one on the title of the property,I wouldn't want issues with whom to work with after he is no longer there to handle his interest.

I just spoke with my tax man and he said it would be good if we had this property as a holding, it would be easy to manage as we are right next to it. I have access to a 175K line of credit no interest loan, that I had set up for a possible flip investment, besides cash,  I like the suggestion of 50% down, it would give me reserves to cover any needed payments. I think the interest rate is something they would be open to . and of course we would do a lease with the tenant/ seller.

We would both appreciate that the sale is private and protects us both with the price.

Jack Shea · Answer

1) Have the owner place the property into a trust at the closing table. Such as "Smith Family Trust" The trustee is a person you choose. 2) Purchase the beneficial interest of the trust for the contract price. 3) I would put 50% down and the seller carries a 50% mortgage. 4) The monthly payment to the seller equals the monthly rent, more or less. 5) the interest rate should be in the 5 to 6% range. 6) Sign a regular lease with the tenant/seller. 7) The transaction is private, no public record of the sale price. You pay any required transfer taxes directly to the county or the state.