Hello All, I've been using all my free time since November when I cashed in $30k worth of my 401Ks to educate myself and find the right invest in a college rental property. Seller financing is great for me as my part time W2 job shows only about $25k these last 3 years and my new business shows me breaking even so my loan options are slim. 2020 I earned over $70 with plenty of room for growth this year.
The seller and I have hit it off so far. He says he's holding the property for me until I get back to him with my seller financed purchase offer. He likes the seller finance as his siblings are all financial stable and my primary contact does not want the additional capital gains on his taxes.
The home is currently only tax assessed for $75k, but I know with the improvements completed his asking price of $92k and willingness to work with me on seller financing it is well worth the full ask of $92k .
Can anyone point me towards examples of creative seller financing proposals I can look at. Ideally I would like to offer him 3 options to choose between. I really don't want to loose the deal or pay too much. Is there a safe way I can pay the full amount asked while keeping the printed sale price at $75?
I'm also wondering if there are any advantageous ways to calculate the amortization I can use?
My impression is he will be okay with about a $15k deposit, which is good because I need to frame in a 4th bedroom and find college tenants which could take as much as 18 months as I've already missed their lease signing cycle for 2021.
I'll be researching as much as possible for myself but any help would be much appreciated as I'm crunched for time.
Seller financing can make good deals great for both parties.
What I usually see here is an interest-only, 30-year amortization, 5-year balloon.
If he wants to spread the actual income out and have you pay principal, you'll probably look at a 10-15 year amortization.
Either way, you'll want to skew the interest down but fair as the buyer. You probably won't want to offer 2.75%!
Play with the numbers here at calculate stuff. I use their calculators all the time -- I have the interest-only calculator bookmarked.
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