Advantages of Buy With Owner Financing
Posted in Finance on January 27th, 2011 by mbotee – Be the first to comment
Also known as seller financing, owner financing is growing in popularity in today’s economy. With the credit markets slowing down and people finding it harder and harder to borrow, owner financing is looking better and better as an alternative to traditional financing. Owner financing is when the seller of the property basically agrees to take payments rather than a lump sum. Here are a few things that need to happen in order for the owner to be able to finance your deal:
The owner needs to have considerable equity in the property. The owner will usually have their own mortgage they will need to pay back in full when they sell the property to you. If they don’t have a whole lot of equity, they usually can’t offer to finance a whole lot of the deal. The best scenario is an older owner that is close to retirement. Odds are that they have a good amount of equity or even own the property free and clear. They are looking to retire and just want a steady cash flow rather than a lump sum when they sell the place.


