Help with calculating seller finance deal

Baltimore, MD · Member since 2016 · 19 posts · 5 votes

Can anyone point me in the direction of a good calculator? I have never done an owner financing deal. Could someone please explain this and what the monthly payment would look like? Numbers below:

Purchase price 59,900

2 pts

12%

3 year balloon

1 Reply

33 views

9 Replies

Jump to latestLatest

Sort by

Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y
Sounds like a really lousy deal
0 Reply
Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
7y
@KaTrina Jones "seller finance" can mean many things...are you structuring a purchase money mortgage; is the seller a free-and-clear owner originating a loan to you? What do you mean by points? to who? are you making a down payment? if so, what is it? what is your amortization schedule?...and the other terms of the deal...12%!!! what kind of property?...
If you are looking for a online calculator, here is a basic one: https://www.bankrate.com/calculators/mortgages/bal...
If your deal is more complex, you'll need one with an adjustable amortization. Glad to help, just need more details...
937-979-7000
Realize Multifamily Group11 Review
View Page
0 Reply
KaTrina Jones
OP
Baltimore, MD · Member since 2016 · 19 posts · 5 votes
7y
Thanks @Brandon Sturgill the property is free and clear... points to the seller... he said he may possibly want a few thousand for good faith as a downpayment. I never secured an owner financed deal. Its a SFH.
0 Reply
Dennis Weber
Real Estate Investor · Indianapolis, IN · Member since 2014 · 316 posts · 165 votes
7y
Originally posted by @KaTrina Jones:

Thanks @Brandon Sturgill the property is free and clear... points to the seller... he said he may possibly want a few thousand for good faith as a downpayment. I never secured an owner financed deal. Its a SFH.
Okay, but the numbers needed to calculate payment are loan amount (after down payment), amortization (you can calculate what payment is by knowing how many years you are calculating for understanding that you pay the rest of the principal after 3 years), interest (12%).
0 Reply
Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
7y
@KaTrina Jones ok...that helps a little...sounds fairly straightforward as a seller carried loan...if you are good on the purchase price and confident on your exit strategy and future value of the property I would structure the up front differently...no points,,,just offer a down payment 10% maybe (or less if you can)...you want the longest amortization schedule possible...30-yrs at least...and 12% interest is absolutely crazy...you need to be below 7%.
The seller has needs...if that is a per month monetary figure...work with the down payment and amortization schedule to get him where he needs to be.
Let me know if you want to walk through this...
There are a lot of possible pitfalls on these low-value properties that you need to be aware of as well...especially your exit.
937-979-7000
Realize Multifamily Group11 Review
View Page
0 Reply
Isabel Maria Almonte
Member since 2018 · 5 posts · 0 votes
5y
Very interesting article., thank you. I have this question, in today's Seller's market, does it make sense to sell with Seller's finance and wait 7 years? This is my brother's case. He owns a rental house, not mortgage. Right now the house needs approximatelly $15,000 repairs, excluding the roof. The house is rented for $925.00 monthly. He has recouped his original investment of $54,000.00 already. He proposed to his tenant to purchase the house AS Is for $150 K with 10% down, 5% interest for 7 years. Seller is offering Seller's finance. I think if my brother fix the house, and put it in the market, he can make now in the lower side, $185 K. So, does it make sense for him to ahead and sell it to his tenant
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Type in mortgage calculator in google and type these in with taxes and insurance.
0 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @KaTrina Jones:

Can anyone point me in the direction of a good calculator? I have never done an owner financing deal. Could someone please explain this and what the monthly payment would look like? Numbers below:
Purchase price 59,900
2 pts
12%
3 year balloon

If it's a $100,000 propety, I might do that deal.
What I don't like is the 3 year balloon. That assumes you know what the market will be in 3 years. Too risky for me. I don't normally do anything with a balloon.

0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.