How to convince seller with owner financing ?
I am trying to find a strategy that would persuade a multi family home owner to sell thier property through owner financing which would make them say YES!!
In most scenarios sellers want security through a large down payment and a quick term so that they can get thier money but I want to approach them in a way where they will be willing to go forth with the deal.
Let's say we have a deal with these numbers(hypothetical deal ) :
50 unit apartment complex
$2,000,000 purchase price
8 % cap
95% occupancy at current cap rate
C class property at a strong rental market area
In most scenarios the seller would like to see Proof of funds, and a pre approval from a bank to purchase this complex . At the moment I do not have the credit, down payment and connections to secure financing therefore I would structure the purchase this way :
Tell the seller I would like owner financing for a 5 year period but I am willing to pay more than asking price.
Purchase price $2,100,000
10 % down ($210,000)
5% interest
5 year term owner financing (balloon after 5 years and than I would secure institutional financing )
30 year amortization
Would this entice a seller and would they be willing to go through with owner financing ?
How many of you have tried this approach to secure owner financing and has it worked ?