Benefits of Seller Financing

Seller financing is when a seller who owns a property that is free and clear from any encumbrances assist the buyer in financing the sale. Usually sellers do this when a buyer has difficulty qualifying for a loan or meeting the purchase price. Seller financing offers tax breaks for sellers and alternative financing for buyers who can't qualify for conventional loans.

Half of my properties are being sold thru seller financing, as long as it is affordable by the buyers I set them up with typically a $100 to $300 monthly payment. These figures are usually quite affordable to the buyer since is about the cost of insurance or a car. The only thing to consider is the property price and the years of payment. In my case I like the 3 to 15 year term.

When I started out I sold about two thirds of my properties as seller financing, about 60 percent as seller financing, and about 40 percent as cash. The cash properties, as well as the down payments for the seller financing gave me huge profits up front, but the term sales gave me cash flow.

In a matter of time your cash funds will grow and your seller financing deals for you Tax Delinquent Investments will start rolling in. There is a good portion of the audience starting out like I did with about $3,000 in the bank and only that. My advice to you is to develop that ratio of 60 percent seller financing and 40 percent cash as what I did. But of course each of you can do your own ratio if you want to.

Remember, the interest rate on an owner-carried loan in Tax Delinquent Investments is negotiable and when lending on vacant land you can charge a much higher rate then what a bank would lend to a homeowner.

Seller financing typically costs less than conventional financing because sellers don't charge loan fees. This may encourage a buyer to decide on the purchase faster. Sellers usually aren't willing to carry a loan for a lower return than they would earn if their money was invested elsewhere.

So as a Tax Delinquent Investor, you are actually increasing your chances in making profit. Not only do you make profit from selling your acquired property but you can also earn the interest as well. This is a great strategy to attain great long term wealth.