Creative Real Estate Financing Solutions — Seller Financing

Seller Financing:

Knowing how to effectively use seller financing in your business can help you get more deals done faster and for less money

This is how it sounds; it’s where’s the seller provides the financing

• Legal ownership changes but the payment are sent directly to the previous owner for a specific duration and with a defined monthly payment

If you’re unable to get traditional A-grade financing, you can approach the seller and see if they are ready to finance the deal. The main requirement is if the seller owns their property completely and fully. This is because the due-on-sale clause can cause issues if the property is still in-lien with a bank. The good news is that 1/3rd of Americans (we’re going to assume the stats are roughly the same for Canada) do not have a mortgage on their property.

The Problem With Seller Financing:

Same as the lease-option financing strategy; the due-on-sale clause, allows the bank the right to demand that the loan be paid back in full immediately if the property is sold.

If you can’t pay it back in full with the bank demands it, the property will be foreclosed on.