Seller financing can be great in one's quest for real estate holdings. Advantages include: Flexibility, investors are able to get creative in closing. More options are available for the simple fact that banks are not included. Cost can be lower, some fees charged may be avoided, although I believe it is best to include a title company as well as your attorney. The buyer and seller are able to work more closely to determine the best re-payment structuring, often times making the deal comfortable for both parties.
Seller's can unload higher priced properties, residential or commercial when lending markets are frozen. Seller financing can open windows for buyers that may never once had an opportunity to invest in real estate.
Deals that were once hopes/dreams can now be obtained. Remember, seller financing is not something of common knowledge. Not many people realize that this option is there, Seller's/Buyers having little knowledge in real estate, however wanting to sell/buy there property, may be inclined, if informed of there options. Make sure you ask!
Buyer's beware, It is one's job in any investment to due diligence. Seller financing can lead a misinformed buyer to being taken advantage of. Higher priority mortgages may be in place above the buyer being financed. Interest, or home prices maybe higher then fair market value. Distressed sellers looking to capitalize on down payments can be clever in signing you out of your money.
Contact your local, Realtor to find out retail sales for the neighborhoods your looking to invest in. Websites such as zillow and the local auditors site may be of great value.
Call local, Bank/Credit Union/Mortgage professionals to find out local interest rates. Also refer to websites such as bankrate.com
The life of a loan during seller financing deals in most occasions I've seen are short term, leaving the buyer time to get the deal off the ground, cash flowing, and finally re-financed.
Always remember, seller financing or not:
-buy low, sell high.
jsd
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