Seller financing deal

3 Replies

So, I asked a property seller for seller financing on a 35k single family that I plan on renting for approximately $900-$1200 per month. This is what the seller offered:

1. Sale price 35,900.00
2. Down payment 10,000.00 (We can discuss this amount)

Financed 25,900.00 @ 7% monthly payment 5 yr term 1 1/2 year balloon =

$431.00 principal and $151.08 interest total $582.08 a month

The balloon means in 1 1/2 years you need to do one of the following to the balance 1. Refinance 2. Payoff 3. Refinance our terms. I would prefer #1 or #2 as I do not want to hold debt.

This would be in writing and a mortgage would be put on the property.

Should I take it? This will allow me to put this property into my business (S-corp) and refinance in about a year in the business.

@James D. Be careful with the 1 1/2 yr balloon. Typically a bank likes to see 2 years tax returns on a property before they will refinance it. That is something to keep in mind unless you have a good banker that you have built a relationship with then no worries.

and your payment would actually be 512.85 a month. 

See if the seller will give you a 10 year term since he wants 7%. that would reduce your monthly payment to 300.72, netting you 600-900 a month

It's hard to get refinancing for a $25k loan, more so if in an Scorp.

Originally posted by @Wayne Brooks :

It's hard to get refinancing for a $25k loan, more so if in an Scorp.

 So,

What type of business entity should I establish for my RE investing business? LLC-S-corp?

My plan is to buy and hold and to flip,etc.

What do you suggest?

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here