Top Benefits of Owner Financing For Property Sellers

Top Benefits of Owner Financing For Property Sellers

   As everyone already knows I am a huge fan of both buying and selling using owner financing. There are so many benefits to be had by selling your property in this way.

 

  1. Quick Closing– Since there are no conventional lenders involved to spoil the deal or drag their feet, which instead  allows you to close in weeks vs. months with lenders.  Best of all there are no financing contingencies like there are with conventional lenders. No hassles no hurdles!
  2. Top Price– Since the owner will be financing the property for several years they are able to demand a higher price or even in some case higher then market value. This is a great benefit to the seller rather than taking a low ball offer.
  3. Monthly Income– Since almost all owner financing deals are structured so that the seller will receive monthly mortgages payments over and beyond their expenses. Having an investment pay you monthly payments while secured by the real estate is a very powerful tool, much like a bank CD but only paying higher returns and still having it secured!
  4. Tax Savings– This has to be the best benefit especially if you own the property outright or have a lot of equity. Since if you sell your property you will have to pay capital gains taxes on that money which could cost 10s of thousands of dollars. By selling using owner financing you only have to pay on the yearly amount you receive. This will allow you to defer paying huge capital gains taxes. We have even worked with several owners that love long term owner financing of 10-20 years, they get 6%-10% per year on interest only mortgage payments while having it secured by the real estate. They live off the monthly income!

 

The whole outcome is to create a win-win deal. Since most sellers do not need the full equity to be cash out upfront, using owner financing structures can be a wealth building strategy.

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1,027 Comments

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  4. Still learning to navigate the ups and downs of real estate…had a showing set up & cancelled all w/in 5 minutes.

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