Seller Financing For Landlords – Seller Financing Specialist

What Are the Advantages of Seller Financing for Landlords?

1. Be the Bank, Not a Landlord.

Imagine having an investment property that pays you regular monthly income without having to worry about tenants, taxes, or toilets.

You can sell your investment property with a Contract for Deed for full value and receive monthly cash flow for the term of the loan. It can be 3 years or 30 years depending on how long you want to receive payments. This is a great way to create a residual income for retirement. And the tenant-buyer takes care of all the maintenance, taxes and insurance.

2. Make money off the bank’s money.

If you have a low interest mortgage on your rental property, you can charge a higher interest to the buyers and make money on the bank’s money. If you don’t have a mortgage, you can still make money on your equity.

For example, if you have a 3% interest loan, and let’s say you charge the tenant-buyers 5%. You are making 2% on the bank’s money each month. If you don’t have a mortgage on your property, you can earn a larger percent of interest on your equity.

Here is an example of how that would work.

In this example, the mortgage on the property is $350,000. The interest rate is 3%. The sales price of the is $500,000. The down payment is $50,000. The Seller Finance Contract is 5% interest. The house was appraised for $455,000. There is a balloon payment due in 10 years. The seller’s equity is $100,000. That is the difference between the contract amount and the balance owing. The return on the equity for the Seller is 10.77%. That is not a bad interest rate. The Seller receives a monthly cash flow of $817.86

In Summary: The Seller sold their house for over the appraised value, is receiving $817.86 a month, and receives an equity payment of $117,049 when the loan is paid off in 10 years. That is an additional $17,049.

“Why aren’t more people doing this?” Don’t be a Landlord, Be a Bank

3. Spread your capital gain taxes over the life of the contract as opposed to paying them all at once.

When you sell your property if you have not lived in it for at least 2 out of the last 5 years, you will have to pay capital gain taxes in the year that you sell it. Unless you sell your property with installment payments in a seller finance contract. Then you only can pay them in the year that you receive them.

When we present this to clients they say, “Why aren’t more people using this technique?” The answer is Sellers don’t know that it is possible.

And…Most real estate agents and title companies don’t know how to properly do a Seller Finance Contract. My team of professionals has helped hundreds of sellers just like you.