How do you overcome seller objections to Seller Financing deals?

[Anthony Antonicello]

My seller is objecting to seller financing because she's afraid she will not be able to obtain another mortgage during the agreed upon term. How should I overcome this objection?

[Brian Gibbons]

First of all seller financing is not talked about in the press or from real estate agents when they're doing sales listing presentation.

If the seller has very little equity, selling on terms on terms might make some sense, or just renting it out and waiting for some principal pay down or appreciation or both.

The OPs question about whether or not they're going to get another loan is not an easy question to answer.

What is common is a lender giving 80% or so of collected rent for investment properties, and comparing that with the PITI payment of what's being paid.

So as an example, hundred thousand dollars house, thousand dollars in rent, $800 will be credited on the income statement.

Think of it this way, the seller will be converting the property into an investment property, and the rent compared to expenses will be on the application.

In dealing with the basic objections of sellers with seller financing, whether it be subject to, lease option assignments, or wraparound mortgages, I always stress that there are three basic choices, one, so with an agent and pay the cost to sell, to rent it out with a property manager and wait for appreciation and principal paydown, or three look at seller financing options. That's it, no other choices.