So I’m working on paying off debt currently to open up more avenues in my dream to invest in Realestate and I’ve heard of owner financing and my question is if this would be possible in a situation we’re someone owes back taxes you owner finance but pay off the back taxes and then refinance out. This is a rather vague description, as I don’t know tons on this, or if this is even possible. But would love any light on this subject from experienced investors if this is a possible way of getting into a deal, and if not an explanation as why it’s nit doable for my own knowledge in he future.
And maybe for context I’m wanting to get my first deal under my belt but have the issue of no capital and bad credit until I have it all paid off so am looking for more creative way s to get into a property.
Seller financing is when the owner carries the note. You sign a promissory note with the terms of the financing.
Most sellers want some money down. Sometimes you can work out no money down, but expect to pay higher rates.
Owner financing isn't like getting a bank loan. The rates are higher and they usually will have a balloon payment for the balance of the loan due at year 5 or year 10. Some sellers will do longer, but it depends on their situation.
If you did owner financing, at the close, the proceeds of the sale from your down payment will have to go towards the back taxes. Don't forget that you'll still owe closing costs.
You can refinance down the road, but that will be based on your ability to pay the loan at that time.