Seller Financing Offer

4 Replies

Hey everyone. I've been lurking on the site for a few months now along with researching various homes. I live in Nashville and don't have much capital available to start so I've been considering how to make offers on property through seller financing. There's a duplex property I found listed for $350k so an offer I was thinking is along the lines of

$250k offer for house

80% of that as a seller financed mortgage so $200k

Then I would like to offer the seller a 75-25 split on profits (where I take 25%) as a repayment option for them putting the remaining $50k as the "down payment"

I know this is a question best answered by the seller, but I was wondering if anyone could help explain if that offer makes sense or not. I would reach out to the seller first and see what their motivation is for selling before making the offer. Any help is appreciated, thanks!

Also, what are some other seller financing strategies that you like to use?

@Ryan Cotter   Certainly it's possible but very few sellers are going to let their property go without you giving them any cash.  It also highly depends on why they're selling.  If they need to relocate and buy another home with the funds, then of course it won't work.

I've had better success just searching listing where they already say "seller / owner financing" as that means they're open to it.  Otherwise you can always ask, but you may have to go through a lot of listings.

Good luck!

Originally posted by @Ryan Cotter :

Hey everyone. I've been lurking on the site for a few months now along with researching various homes. I live in Nashville and don't have much capital available to start so I've been considering how to make offers on property through seller financing. There's a duplex property I found listed for $350k so an offer I was thinking is along the lines of

$250k offer for house

80% of that as a seller financed mortgage so $200k

Then I would like to offer the seller a 75-25 split on profits (where I take 25%) as a repayment option for them putting the remaining $50k as the "down payment"

I know this is a question best answered by the seller, but I was wondering if anyone could help explain if that offer makes sense or not. I would reach out to the seller first and see what their motivation is for selling before making the offer. Any help is appreciated, thanks!

Also, what are some other seller financing strategies that you like to use?

Offers with too many zeroes look like the balloon it is and will be rejected. Maybe countered. 

Something like $251,670 at least looks like it came from your calculator and you're trying your best. But ultimately comps and seller motivation will determine their acceptable price. 

If I have a good tired landlord that owns free and clear to offer SF on, I usually put 10% down at 6% over about 24 yrs. Sometimes there's a 5yr balloon if the seller is older.

If listed with a vanilla Jack and Jill seller, I don't bother with SF.   They will have a mortgage and need the $ for their next purchase .