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18 Reasons Why Seller Financing Should Be The First Thing You Ask For

Thank you for continuing this investment journey with me. Together, we can accomplish more than
either of us would alone. Let me share with you just one of many possibilities that await you in real estate
investing. Real Estate Financing

One of the most underused tools in real estate is seller financing. Most people finance their properties
through a bank or mortgage company. Seller financing works exactly the same way, except the seller
issues the mortgage.

Seller financing looks just like a regular loan on paper. There is a term, a loan amount, a payment
schedule, and an interest rate just like a normal mortgage. However, seller-financed loans have many
benefits over regular financing for both the seller and the buyer. Consider just some of the advantages:

Seller's Advantages

v Quick, easy and everyone qualifies

v Cash at closing and payments over time

v Taxes only paid as principal received

v Can add balloons and prepays on loans

v Great opportunities for security

v Possible to get property back

v Can continue monthly income

v No more property management

v Can sell property for more

Buyer's Advantages

v Quick, easy and everyone qualifies

v Can negotiate with seller unlike bank

v Loan does not damage credit

v No loan fees and minimal closing costs

v No money down

v Can provide security with other property

v No tax returns or proof of income needed

v Can quickly bail out distressed seller

v Can make a partnership with the seller

As you can see, seller financing creates fascinating opportunities because it meets the needs of both
sides of the transaction. While seller financing can be intricate, it is very basic at its core. Once you
understand seller financing, you can use it to make great profits!

Sellers are often afraid to use seller financing because they perceive it to be risky and not in their best
interest. In truth, sellers benefit from financing the deal themselves because they have more control over
the situation.

Buyers often do not know how seller financing works and lack confidence to "sell" the idea
to the sellers. If buyers and sellers understood the benefits of seller financing, you would see more of these
types of deals. Seller financing creates solutions in real estate transactions‘.

In closing, let me show you how seller financing can enhance your real estate investment opportunities.

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Happy Investing,

Kendall E. Matthews, CRMC
Phoenix, Arizona Investment Real Estate

P.s. Get my new e-book "101 Legit Tips To Boost Your Credit Score" Click Here to learn more.

P.s.s. Click here to receive my Free mini e-course for new and experience real estate investors. "7 Steps To Better Real Estate Investing."

Posted by Kendall E. Matthews on 02/05/2008 10:30 AM

Comments (6)

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6 Comments on 18 Reasons Why Seller Financing Should Be The First Thing You Ask For

FEB

2008

Good information!

You bring up a very important form of financing! Although Real Estate Agents are aware of this opportunity, it tends to sit so far back in our minds that we don't immediately recoginze it as a tool to close a deal that works for both the buyer and the seller! Those people who have owned a home for several years and have some serious capital gain potential could provide themselves with a nice security blanket by offering as much seller financing as possible without infringing on the potential purchase of their next home.

Thanks for reminding us of this important potential tool!

MAR

2008

There are even companies, like NoteWorld, that will service owner financing so you don't have to take responsibility for the processing of monthly transactions or securing the documents.

JUL

2008

Hey Kendall,

I buy Owner Financed Notes and can do it at closing, even on purchases so seller gets cashed out at escrow :) As low as 500 fico and 2% Down. I discount the note 10-15% depending on risk, so they do have to have a little equity to make it work. And this isn't a split appreciation thing or a big option fee or anything like that. So would adding this to your listings help them move?: "Owner Will Finance--No Bank Qualifying--Low Down Payment--Fixed Rate" Let me know if I can help---Nick

MAY

Very, very smart! I used it throughout my career and I tell everyone of my students that if they aren't using it they are saying no to thousands of buyers they could be working with that no one else is.

JUN

I have just begun owner financing. Just closed a deal with the seller financing the buyer's purchase. Used a rate of 6%. I repesented the buyer, so 6% was fine. If I had represented the seller, I would have wanted a higher interest rate.

You know how it is easy to do for others, but difficult for yourself? I need to finance my own listing of an investment house. Most of those interested can't qualify easily, but can afford the monthly payment of principle, interest, taxes, insurance. If this is with a 3 year balloon, and interest rates seem to be going up, what interest rate would you suggest I use? How much of a down payment on a $225k house?

Do you use asking price or appraisal in this situation?

Would someone explain Owner Financed Note?

Thanks in advance for your responses. This is helpful.

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