Conventional Or Seller Finance?
Hello,
I'm days away from making a purchase on my 1st investment property. I'm dotting all of my i's and crossing all of my t's, but one question came to mind as i was doing this. What is the pros and cons to seller and conventional financing. to my limited knowledge, i understand that seller financing leaves your conventional loans available for great deals that sellers would not carry back. So i have a couple of duplexes in mind to purchase to start off with. I don't see where it matters if i do seller or conventional financing here. I don''t see any cash flow until after the rent is paid. Is this corect or am i leaving some things out? I haven't commited to anything as of yet, but when Jan 05 comes around I am jumping in with both feet hitting the ground at a dead sprint. I will have less than a year to get my affairs in order before i retire Army. Please advise.
thanks and Merry Christmas to ALL!
G.I. Joe
Joe,
"I'm days away from making a purchase on my 1st investment property. "
- I assume you mean from making your first offer?
"What is the pros and cons to seller and conventional financing"
- With seller financing you can negotiate terms, like, delayed payments (not pay anything for 6-12 months, all depends on seller) and yuo save closing costs. If you seller finance a second then you can save yourself some down payment money.
"I don''t see any cash flow until after the rent is paid."
- Does that mean these are to be built? I don't understand the relevancy
[addsig]
there are many advantages to seller fin. - ease of requirements to qualify, quickness to close, amount may not be limited to income........the list goes on generally speaking o/f is much more nego. than conv. fin........km
What I meant when i say " I will not see any cash flow until after the rent is paid", is that After i pay the mortgage I will see $200 PCF for me. Which brings me to my next question. If i do seller fin for about a year or two how ( if possible ) can i refinance mortgage to pay seller off. To my understanding the note is still in the seller name right?
thanks
joe
why would you want to pay off the seller before your term (assuming you got 5-7years)ended? People pay banks for 30 years on a home. You should milk the seller financing for all its worth