Seller Holding Short Term Balloon Note??
We are in negotiations with the seller of a vacant property. He wants a quick close. We can take money out of a paid-for property we have, but that takes time. We are going to suggest him taking back a short term (maybe 6 mo.?) note. Purchase price 85k, 30k down from us, short term note for 55k (until we can get the property rehabbed and rented, and apply for a 1st mortgage to pay off this seller). What interest rate and terms are the norm for this type of arrangement? Any other suggestions?
Thanks.
There is no norm. It is all negotiations. The best terms would be the length you want and NO interest, and it would go up from there. At some point, it the rate and terms would kill the deal, and that's your limit.
Roger