Some background info, I am Pediatric Dentist who finished school around August of last year. Currently I live out in the Valley of Southern California with my fiancé and we are looking to relocate closer to the office that I am a partner at. I will be purchasing the office in 2020 and as that will be a large loan and due to my high amount of student debt I would like to avoid traditional financing and remain as liquid as possible.

With a few months left in my lease I am looking to purchase a Condo with owner financing in a complex close to my office. I intend to print out a one page letter explaining owner financing and mail it to all condo owners at the complex in a hand written envelope. My goal is to keep the explanation short, simple, and enticing to the owner highlighting the benefits they would receive.

Below is a rough draft of the letter I intend to send. All feedback and input is welcome.

Thank you for your time,

Dear Condo Owner,

My name is Dr. Justin Berman and I’m a local Pediatric Dentist moving to _______ with my fiancé Danielle. We are interested in buying a 2 bedroom condo in ________. I wanted to begin the conversation about how we might be able to come to an agreement allowing me to purchase your condo. We are currently looking for an owner that owns their condo free and clear (no mortgage) who may be interesting in selling the condo with owner financing. This would allow us to start building equity as we begin the next part of life, while you as the owner accrue more wealth and defer taxes during the process.

In case you are not aware of how owner financing works: this is a situation in which the seller of the property “carries the mortgage” for the buyer, essentially acting as the bank. The seller and buyer can negotiate on all terms of the loan, such as down payment, interest rate, and amortization schedule. After the property is purchased, the buyer pays the seller monthly mortgage payments, just like you would pay a bank in a conventional financing situation.

The benefits of owner financing for the seller are that you will have no headaches managing the property, nor do you pay the condo fees, taxes, home insurance instantly generating over $800 more in cash flow monthly, on top of earning a large amount in interest during the payments. This can allow you as the seller to turn a good deal into a great deal. The benefits for you include being able to spread out the tax burden of the sale and to gain a passive stream of income every month. Below is an example of how the numbers would work.

Example of owner financed deal: For Demonstration Purposes Only – this is not an offer (numbers to be adjusted if desired)

Purchase Price: $350,000

Down Payment: $15,000

Loan Amount: $335,000

Annual Interest Rate: 4%

Amortization Period: 360 months

Number of Payments: 120 (balloon payment after 10 years, property to be refinanced with conventional financing and remaining balance paid to owner)

Monthly Payment $ 1,599.00

Balloon Payment $ 263,000.00

Total Payments $ 191,921.00

Total Interest Paid $ 120,847.00

As you can see this situation would provide a true win-win situation for both parties involved. On my part I will pay to have a lawyer and real estate agent draft the documents for your review.

If interested, or if you have any questions please don't hesitate to reach out. I am more than happy to meet in person to discuss further.

Dr. Justin Berman

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