Real-World Examples of Seller Financing Deals and Terms

Curious if anyone could share some real-world examples of seller financing deals/terms they've put together? I'm wondering what the market will bear on the high side of interest rates + amortization schedules?

These are the basic terms I've offered on several seller financed deals on lower-end properties.

  • 3 year term
  • 10% down (or however much will cover my initial investment)
  • 9.99% interest
  • Add an additional $25 per month to cover the monthly servicing cost (this pays for whatever software or loan servicer I'm using)
  • If the annual property tax bill was $120 (for example), I could divide this by 12 and add another $10 to the monthly payment

For example, if I have $2,000 invested into a property and I'm selling it for $10,000 with seller financing, I could ask for a $2,000 down payment, and amortize the remaining $8,000 balance over 3 years (36 months). If I plug these numbers into a mortgage calculator, I can see that the payment would be $293.10 - this is AFTER I've been made whole from the $2,000 down payment, so that monthly payment for the next 3 years is pure profit.

Keep in mind, another way to approach this would be to simply charge 0% interest and increase the purchase price (you can highlight this as a selling point, and it can potentially simplify things a bit too... but it's really up to you and the buyer).

Feel free to run whatever scenarios you want on our free mortgage calculator.


thanks seth, you the man

So I've only sold two properties so far, but I've been wondering myself if others with more experience would see any disadvantages to the way I seller financed the second one...

I acquired the property for $1,796 all in, including price paid to the seller, back taxes, some title clean up work and closing costs. I marketed it for sale for either $6,900 cash or seller financed at $695 down and either $149 per month for 60 months or $199 per month for 42 months. But a very interested buyer said to me that he wanted to finance it, would gladly pay a higher down payment and longer term, but needed his monthly payments to be no more than $99, so I offered to sell it to him for $1,895 down and $99 per month for 72 months, and he agreed. Despite the longer, 6 year term, I was actually happier with this than the financing scenarios I had marketed since I got all my money out plus $100, right away.

The part I've wondered about in terms of advantages/disadvantages is how I structured the financing in relation to the sales price and interest. I took the $7,128 in financed payments we agreed to (72 X $99), added that to the $1,895 down payment and just inflated the selling price to $9,023 total and called it a 0% loan. I figured this was to my advantage compared to having a lower nominal sale price but higher interest on the financed portion, because in the no-interest/higher-sale-price approach, if the buyer decides to pay off the property at any point early, I'll still get the full $9,023 (and as a bonus, being a lazy person, I figured I won't have to deal with any messy interest based amortization calculations, too). I did include a % based penalty that would kick in every month should the buyer stop paying, which was the only advantage I could think of, otherwise, with an interest-bearing scenario. Maybe there's a relative trade off to this approach I haven't though of yet, though?

Edit: Oops, just read Seth's post above more carefully and saw his last paragraph. Sounds like there's nothing wrong with the "0% financing" approach. As I said, I think it actually has some advantages. The person I was working with at the title company kind of acted like I was crazy to seller-finance something at 0% for 6 years. I figured she just didn't have all the information that I do, but it's good to have confirmation on that.

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If you need financial assistant in form of loan to close your deals or purchase of properties Hit me up

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