Why is seller financing important in Real Estate?

Traditional funding can only help grow a real estate portfolio to a minimal level.

 

As an investor, you already understand negotiations play an increasingly important role in creating a mutually beneficial deal for both the buyer and seller of real property. Houses are typically sold much faster for motivated sellers that offer seller financing and/or a lease with option to buy.

 

As an investor you could hit a wall with 4 mortgages and not get approved for the 5th loan. It’s said that you can get mortgages on up to 10 houses, but I’ve yet to see it. So, seller financing or a lease with option to buy becomes an excellent way to buy more houses.

 

The seller benefits from this arrangement by collecting interest and using the property to secure the loan. A loan company, title company, and/or lawyer can help put together the necessary paper work and mail statements to the buyer. A down payment is pretty standard but the down payment shouldn’t be excessive.

 

Resources:

http://www.realtor.org/reports/seller-financing-impact-of-the-safe-act-and-the-dodd-frank-act
http://themortgagereports.com/2193/5-10-investor-properties-financed-fannie-mae
http://www.nolo.com/legal-encyclopedia/seller-financing-home-sales-30164.html

 

 

 

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