I have an opportunity to buy a property with owner financing and keeping the owner as the tenant. I am looking for advice from anyone who has had this opportunity and how have you worded the agreement? The verbiage I have come across is something to the affect of what is below. Thank you in advance
We offer full price with X amount down, seller financing for $XXX,XXX at 5% (or any rate above the prime rate, amortized over XX years with a five-year balloon loan. If we don't refinance in two to 3 years, we will increase the rate to 6% in years four and five.
@Brian Hietpas - Ideally you want to lock yourself in with the longest term possible and no balloon. Has the seller indicated they'll only carry back financing if there's a balloon?
@Marco Bario , during my conversation with the seller on Saturday, he was not adverse to financing but would rather we get traditional financing. I was able to get him to commit to paying $1800 a month for the house, $2000 for the commercial space, on top of the $550 a month for the 1b/1br that is also located on the property.
@Brian Hietpas - not knowing details about the financing terms or potential cash flow after debt service and other expenses all I can say is kudos for having what sounds like a successful seller financing discussion with the seller. Best of luck with the deal.
Thanks @Marco Bario