Seller Financing Structures and Setup
I want to move forward with setting up a seller financed deal, but am unsure on how to approach and how to structure the deal.
I’ve heard of two structures and want to know if there are any others that anyone has used.
1. Seller carries a note similar to a conventional loan ( x% down payment, y% interest rate, 15/30 year mortgage)
2. Seller carries a shorter term note at a higher interest rate and accepts interest only payments for the term. At the end of the term a balloon payment for total amount of the property price is due. The buyer then refinances the property with a conventional loan to pay off the seller.
Are these typical setups? Are there other structures work?
Once a structure is selected, what’s the best way to present that to a seller? Informally or should a contract be drawn up and presented?
Any advice is appreciated!