Owner financing, hold the note

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I want to purchase a MF from someone, I want to offer 20% down but have them hold the mortgage like they’re the bank. I’d like to explain to this person the pros and cons of him holding the mortgage himself with no banks involved. What rate should I expect him to get in return?



Hi @William DeLuca, there's really no set rate to offer. Some sellers will go for 0% and some may want 2-3% above a typical bank financed rate.

The pros for the seller include continuing to get a monthly check, but without having the headaches of being a landlord... 

Plus, by holding the note, they safe a huge chunk of tax bill to Uncle Sam this year. By only paying tax on what you pay them, they spread out the tax hit over a number of years vs. paying a big chunk of moolah this year.