Thoughts From Note Investors on Seller Financed Note Increase

[Tracy Z. Rewey]

We buy seller financed notes so each year we track the stats. We saw a 15.9% increase in the dollar volume ($23.5 billion to $27.3 billion) and a 7% increase by count in 2021.  The increase in the dollar volume would be expected in general due to the increase in real estate prices.  The increase in the number of transactions seller financed was a pleasant surprise since it is such a hot real estate market with many cash sales or sellers not needing to offer concessions like owner financing.

We usually see increases in seller financing inventory when conventional lending gets tight or a real estate market softens.  Curious on your thoughts for the uptick in inventory?

[Marco Bario]

Quote from @Chris Jeub:

Could it be education? I didn't realize seller financing was even an option a year ago. Bigger Pockets opened that world to me. My son closed a great deal with seller financing, and I now ask about it all the time when searching for properties.

It could be that! 

I notice the Bigger Pockets crowd refers to seller financing as "creative financing." It's really just the tip of the iceberg of creative dealmaking, but it's at the core.