Consider Owner Financing
In the current market, it is hard to get loans to buy properties and many real estate sellers are stuck with properties they can’t sell. There is a plan B! Plan B is to be the lending institution. In other words, sellers can use owner financing to sell the properties and then turn around and sell their owner financed note.
To make a good marketable note that you can sell for the highest amount you should do the following:
- The down payment should be at least 10%.
- A competitive interest rate, not too low, not too high. In general, 8-10% is reasonable.
- Monthly payments are for principal + interest. Avoid interest-only terms.
- Avoid Balloon payments.
- Credit score, the higher the better. Make sure you get a credit report on the prospective buyer.
- The note has to be in 1st position.
In addition you can ask for a higher purchase price when you carry the financing. This is very doable, but please seek professional help if you have questions. Ask around for a local real estate broker that is familiar with owner financing, or contact us, we are here to help.
