Seller Finance or Traditional?

[Shelley Rubino]

Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!

[Jaycee Greene]

Quote from @Kyle Deutschmann:

Quote from @Shelley Rubino:

Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!

I would certainly consider a seller financed deal if it was more attractive than what a conventional or DSCR lender can offer. That being said, it's rare a seller will want to hold the note for a full 30 years, so it's good to be prepared with a solid exit strategy to refi or sell the property whenever they want their money back.

Happy to chat and see if I can help you find anything better, depending on what the seller is offering! 

@Shelley Rubino in my experience, seller finance deals are often only 2-3 years (based on 25–30-year amort) with a balloon at the end that you look to refi.