Require Seller Financing
As a seller can I require seller financing?
Example: I have recently converted a small apartment building into a condo complex, I am selling the condos at $100,000 seller financing 8% 30 yr, no bank qualify with $3-5000 down. I want to collect on the interest over a long term. Could I say to my tenant buyers that would qualify for a conventional $100,000 loan that without my financing the price for them is $125,000.
Or should I just say seller financing ONLY with a $10,000, 5 year prepayment penalty for those that want to refinance.
What are your thoughts on the subject?
All feedback is helpful and appreciated, Thanks
Jorgan Cattin[ Edited by jcattin on Date 04/26/2004 ]
I would reverse the process, state your price as 125K and then they save XXX by going with your financing. I wouldnt make the gap 25K, personally I would only save them 10K at most. Or better yet, just set it up so that they get a no payment till XXX with your financing. Curious as to what others would offer as well.
On a side note, If your intent is to eventually sell the notes, you may want to make sure that the credit scores are at least 600 so that they are marketable, should you choose to sell them later.
Good Luck,
Kyle
If a seller wants to pay all cash, then why hold a mortgage? Your return would be much higher if you were to reinvest that cash in real estate rentals than to earn interest on the mortgage.
In addition, with even the small rise in interest rates that is coming, your $100K seller financing will lose value(if you wanted to sell the note).
AE