Getting an owner to finance a sale, or a portion of a sale, can be wonderful.
It can be also dangerous because the legal agreement often are biased, and the
buyer may have little equity in the property being purchased. If you are willing
to gamble on the equity, a good attorney can help you overcome the legal issues.
Finding a seller who is willing to participate in some aspect if the financing
is especially handy when buying commercial property and large multifamily
buildings.
If you arrange a deal solely with the owner of a property and never meet with
broker or a banker, make sure you have a good lawyer looking after your best
interest. Not all sellers who finance their own sales are looking to take
advantage of you. Many sellers prefer to receive their money a little at time to
reduce their tax liabilities. I presently am buying some land with full owner
financing, and the elderly seller doesn't want me to pay off the loan at once.
He owns extensive real estate and is not interested in quick cash that would be
hit hard by taxes. A lawyer i know looks at his hand sales the same way.
When you find a seller who is willing to finance a portion of a sale, you may
be on the verge of a great opportunity. However, the attractive financing should
not be what pushes you to make a purchasing decision. Decide whether you would
buy the buildings if the financing were not so attractive. If you feel the
property is good deal with or without seller financing, proceed in our purchase
arrangement. But if if you realize that your main motivation for the purchase is
the financing, walk away. Many purchase and financing agreements require little
money and even invite tarnished credit; However you must enter deals with
extreme caution..
