Seller Financing, where do I look?

Question

I came across a video the other day on BiggerPockets and they were talking about seller financing. I’ve never heard of the term but it got me thinking what should I be looking for and where can I find sellers that would be interested in seller financing? Any tips ideas strategies would be great. I look forward to the discussion.

Canesha Edwards · Answer

@Kevin Olson

Hey Kevin,

Seller financing is a great way to purchase properties if you can find a seller that’s willing to finance the property.  Basically, the seller acts as your bank.

This usually works with sellers who have a lot of equity in the property or have previously paid off the property.

For instance, I was recently talking to a seller who’s around 75 and has a few rental properties she is looking to liquidate and move on. However, she lives off the rental income so she would be a great candidate for seller financing if that’s the path she wanted to take.

If I decide to buy the house, I might present her an offer something like this :

15% Down

7% interest with a balloon payment at the end of five years.

I would be looking to refi between year 3-4 in order to make the balloon payment by year 5. The seller will still receive her usual monthly payments for income and I pick up a couple duplexes for 15% down.

The great thing about seller financing is that you can get really creative with your terms.  Sellers don’t have underwriting requirements that banks have and may be more willing to work with untraditional terms. Spend some time getting to know your sellers and why they are selling. Seller financing ,if done correctly, is a win win for everyone.

Just my 2 cents.

Hope this helps.

Happy Investing!

Tj Hines · Answer

@Kevin Olson, target pre-foreclosures, sellers who may be upside down in value, FSBO - owners who aren't successful selling their homes without an agent. You can also target expired listings. You can pull list of targeted leads like this from Listsource. Good luck