I am a buyer interested in purchasing two condo's from a local investor. I would like to do seller financing. Each property is listed at $70K. Seller told me his mortgage payment is $375. I am thinking about proposing a 5 year ballon payment where I would pay him his $375 monthly payment plus10% interest (total of $412.50) with a down payment of $2K on each property. This is my first deal and wanted opinions on how this deal sounds for me the buyer and for the buyer. Thanks a ton
You could phrase it like this. Figure our his loan balance in five years. Say it's $50k. He wants $70k. So you say I'll pay you $333 a month for 60 months, then I'll pay you a $50k balloon payment. That's $70k.
If he wants at least $375 a month, pay that for 48 months, then the $50k.
I think that is a good place to start - I would know what your top offer is and be firm in that - this is a negoiation so if that is your top offer then start lower and work your way up - or make it clear you not going to play the negoation game and this is it.
If I didn't "need" the cash I would consider your offer - but I would probably ask for 5% down and depending on the usary laws of the sate I would ask for more %age
Charles,
How do you go about convincing a seller to accept zero interest in an offer. I am interested in offering owner financing to buy properties on properties around 100k in dallas, tx.
I was thinking of offering 10% down payment and a 30 yr fixed at 6% interest rate, would that fly ?
How could I get a seller to accept zero interest, need suggestions, I want to make it my business to acquire more properties
thanks
Whenever I sell on a land contract I amortize the note over 30 years (more interest paid to me, less principal paid down for the buyers), and require a balloon 24 - 60 months down the road depending on interest rate, strength of the buyer, etc.
Well actually I was including a balloon in my example, I am not experienced in seller financing yet. Looking for advise to get started.
To me the real attraction of doing buying with sellers' financing is not to have a conventional loan because of the 10ppty rules. So if I include a balloon the only way to repay the seller would be to sell the property, is that right ?
Or is there a third way to pay off the property without doing a conventional refinance or selling the property ?
Back to my original question: How do you convince a seller to accept no interest as stated above by Charles Parrish ?
If they are a motivated seller, they will do a lot things. Just ask. I've also heard of people presenting three offers to them. They vary the terms and price and just have the homeowner pick one.
You could phrase it like this. Figure our his loan balance in five years. Say it's $50k. He wants $70k. So you say I'll pay you $333 a month for 60 months, then I'll pay you a $50k balloon payment. That's $70k.
If he wants at least $375 a month, pay that for 48 months, then the $50k.