There are all kinds of ways to buy a property. Though many people buy a property with the financing of the bank, there is a significant number of people that buy real estate with owner financing. This can be advantageous for the buyer because they have to bring less money to the closing table. It also can be a good solution to the seller in that they get their money over a period of time without the hassle of tenants, toilets, and the like that come with being a landlord.
As we think of owner financing, I want to share some creative financing options that you might not have been considered. Most people are quite familiar with the thought of buying a property with zero interest and no money down. While those can be good, they are not the only creative financing options. Let me share a few others as follows:
DEFERRING PAYMENTS FOR A TIME- This can be helpful to purchasers of a property as they prepare it to sell or to rent.
SUBSTITUTE COLLATERAL FOR A LOAN- This can be helpful if you are preparing the house to flip, and then you substitute the collateral of another property you buy or already have.
SMALL FIRST LOAN AND A LARGE SECOND MORTGAGE STACKED TOGETHER- What this means is that the borrower has to pay off the first loan before they begin payments on the second loan.
These are a few creative financing options when you buy or sell a property with owner financing. While these might not be options at your friendly neighborhood bank, they can be options when the seller is also the bank if all parties agree. Best wishes in your real estate pursuits.- RLW