Question on Owner Financing

[Stuart Gardner]

Hey BP Community,

Lately, I've been reading up on Owner Financing, and I have a few questions I'm hoping the community will be able to help me out with.

Just as a side note, the property is owned by an out of state owner and is free and clear.

Questions:

1. When purchasing the property, how does title ownership work? Is it set up like a traditional deal, just with the seller as the 'Bank', or are there other steps that need to be taken?
2. Is a down payment typical, or does that really just depend on the deal?
3. If I was to then purchase a second property using traditional financing, would the OF deal affect my ability to get an FHA loan?

I appreciate any insight in the process and if there are any good resources out there that help you, I would love to know about them. 

Best, 

Stuart

[Tom S.]

@Stuart Gardner  Welcome to BP!

1. Yes.  You're the owner and make payments to the seller, just like you would a bank.

2. It is typical, but it's whatever you can negotiate.

3. Yes, even if the OF deal isn't on your credit, it would reflect on your bank statements and your tax returns.

Biggest tip - get the property appraised so you don't overpay.  

Good luck!

- Tom