Owner Financing (explain)
Could someone explain to me how owner financing could work?
I'm looking at a house that the seller wants 75000 for.
Id like to pitch to him owner financing but dont know enough about how it works.
I would be looking at getting my own mortgage for it within 5 yr.
I would be residing in the house.
Thanks in advance
Ask him what he will be doing with the money, if it's invest or save, show him how you will give him 10% interest instead of the 1-3% he would get at the bank or the gambling of the stock market. Give a 5 year balloon where you will pay him off.
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In addition, you could show the seller how they can sell the owner financed note at closing, cashing them out, while you get into a property you want.
Hope this helps, Dave
Great advice by Ray. I bought my first home in 1994 in California that way.
In fact, the Homeowner was an older lady that really didn't need the money or the capital gains at the time. When we explained how we may be able to put together a deal that would benefit her and her immediate needs, she then asked us what we thought we could get as a rate at the bank. At that time 7.25% was a descent rate. Since we were going to reside in the home we offerred $25,000.00 down and owner to finance at 7.25% amortiized over 30 years with a balloon in five years. We had no problem with the Homeowner accepting those terms.
We still live in the home today, cashed the owner out in less than five years and have refinanced the home twice since then. BTW we paid $175,900.00 in a down market and the home appraised in May 2004 at $518,000.00 after only minor improvements over the years. Good Luck.
Dave
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