Updated 6 months ago on . Most recent reply
Owner Financing
Hello everyone I'm working on deal where hopefully I might be able to get owner financing on the property since it's mortgage free.
Can anyone give me any tips with regards to dealing with owners who are going to finance a deal? I'm a little nervous too because the asking price is a little high for the amount of repairs that are needed, but I'm trying not to scare the owner with a low ball offer because I'm focused on getting him to finance the deal so I can get a low interest rate or no interest at all. Thanks
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It's very tempting to do a deal because the owner is financing it for you. Don't forget the basics, buy property for less than what it's worth, not just because you are getting just a little money down.
In negotiations, break everything down into pieces. Do not ask the buyer for a low price, low down, low payment, etc. etc. Ask them for a low price, get them to agree and start the paperwork. Then tell them you are going to have to get a mortgage and it's going to take a while, see if they will rent you the house. When they say they will rent, that means they like the idea of cash flow. Then mention owner financing, it's better for them than renting, no issues to deal with. They say okay. Now say you want payment to stay around $900/month. They say okay. Don't talk in rates, talk in payment amounts.
Ease into all of this rather than calling them and asking for the world. I hate when people call me about a house I have for sale and before they ask anything about the house they want to know if they can take over payments or finance it, etc. etc. They are more concentrated on how to buy the house rather than if they should buy the house. Definitely someone who just set down the "Creatively BUY Houses" book.
Make sure it's a good deal. If it is, you will be able to find a way to buy it. If it's not, don't buy it. It sucks to leave a house that you could have picked up, but there are a lot more.