Seller Financing Terms for Investment Property
Our primary goal is to cash out when we sell- not be the bank. However, in some situations we can seller finance your purchase until you can refinance or pay off the balance. By thinking outside the box you can get a great deal without a traditional bank loan.
TERMS FOR BUY-N-HOLD RENTALS
Keeping our seller financing simple both of us can do more transactions to make more money. Here are a few typical terms we can extend to investors to help you buy investment property without a conventional bank loan. The terms listed are for example because every investor and property is different:
The Down Payment
- 15 – 25% of the total purchase price depending on investor experience and credit’
For example, at $33,000 15% down is $4950.00
The Monthly Payment
- 1% payments – 1% of the total purchase price minus the down payment
For example if the house is $33,000 and you put 15% down that leaves a balance of $28,050. 1% of that is $280.50. So your monthly payment would be $280.50 that includes taxes and insurance. In other words your P.I.T.I. = principal, interest, taxes and insurance would be $280.50.
The Length Of Contract
For turn-keys rental the term we will go out is typically one year. If you cant get financing after year one we will extend the contract one year for an additional 10% of the purchase price that will go towards your principal pay down.
- One year
- Renewable extension at sellers option.
Costs
- Annual maintenance and condition inspection = $95.00
Other
Besides the property, other factors come into play such as your credit and investment experience. So in order to talk hard numbers with you about we’ll need your application.
You can see our frequently asked questions and apply online in about 8 minutes right here
TERMS FOR FIX AND FLIPS
We will lend hard money for fix and flips for a maximum term of 6 month at 21% plus 5 points. No extensions. This funding is available only to experience real estate flippers with 50+ documented flips. We may consider funding if you have equity equal to the loan amount needed.
For example the purchase price is $50,000 and it needs 10k in repairs. We lend 60k for a maximum of 6 months at 21% plus 5 points (5 points would equal $3000.00). No extensions.
Q&A
Question: What happens if I can’t get bank financing after year one?
You will know if we will extension the length before any papers are signed. If we have agreed to a length extension then you would pay 10% for a one year additional extension.
If there is no extension available, or you have reached you max term renewals, and you can not payoff the balloon you loose the property. Because again our goal is to cash out when we sell- not be the bank.
Question: Do you offer hard money on property I see on Investor Bargains™
On some property we can. See the terms for hard money here
RESOURCES FOR REAL ESTATE INVESTORS
Plug in to your REIA
Another great resource for finding real estate investments and Seller Financing Terms for real estate deals is your local Real Estate Investors Association™, or REIA (pronounced REE-ya). That is where investors with a love for real estate, a sincere desire for financial freedom, and an optimistic, forward-looking attitude gather to share timely information and ‘what’s working today’ strategies and examples.
Check out the REIA in Fort Wayne IndianaREIA™ or the National Real Estate Investors Association™
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