Reasons for owner financing - Posted by Jim Cleary


#1

Posted by Carol on October 12, 1998 at 17:38:12:

Also, I believe, deferred taxation on the gains.
If someone is having a tax crunch, this is easier on them
than getting a lump some which may be taxable.


#2

Reasons for owner financing - Posted by Jim Cleary

Posted by Jim Cleary on October 12, 1998 at 14:17:00:

I’m in the middle of Wade Cooks "Real Estate Money Machine"
In the appendix B, he suggests the availability of a pamphlet
OWNER FINANCING outlining the benefits of an owner carrying
back financing. I called the 800# and it’s coming to me
but a day late. I’m on my way to New England to see if I
can get into a house soon. I’ve got to be back there in early
November. My question, after this long explaination is:
What are the four or five reasons most beneficial to a home
owner doing his own financing. (Please understand, I’m not going
to encourage his taking interest every month). I have a
multi-family in mind and have made the offers. 1. Cash price…
too low 2. Small down and balance in 12 months…
too low 3. Fear that in a l/o situation I wouldn’t buy the
house at the end of the option period and they’d be stuck
trying to sell it again. First asking price…$127K; we’re
at $98.5 (their bottom number) AND I believe it knowing what
they paid for it 12 years ago and the improvements they’ve
put in. Any help would be greatfully accepted.
Thanks
Jim


#3

Re: Reasons for owner financing - Posted by Jimbob

Posted by Jimbob on October 12, 1998 at 16:00:05:

The main benefits for the owner carrying the financing are:

Raise the purchase price higher than market.
Raise the interest rate higher than market.
Seller can raise cash upfront from the downpayment.
Still have an interest in real estate without management headaches.
Seller makes a higher interest rate on their money than if it were in the bank.
If the buyer defaults, it’s easier to remove them from the property depending on how the deed was drawn up.

There’s others, but these are usually the main ones.

Jimbob