Fri, 3 April 2015
Cash Flow Friday Tip #12: Understanding the benefits of Seller Financing for both the seller and buyer of an income property
In this week's Cash Flow Friday tip I'd like to share with you the primary benefits of owner financing for both the buyer and seller of an income property. The benefits I'm about to discuss should be used in your negotiations when trying to pitch the idea to the seller or to the broker representing the seller.
Here is what I feel are the top 6 benefits of owner financing for you the buyer:
There's many more benefits than that, but I think those 6 are the primary ones. Now I will say this, most of the time an owner won't just come out and say that they'll do seller financing and I don't suggest you even bring it up during your first meeting with them. In fact, most of the time you'll need to establish a rapport with the sellers before they'll ever consider it, so be sure to be delicate with how you approach the subject and be sure to presentl it as a win-win proposition.
Now let's discuss the big benefits from the owners standpoint, and just remember, most owners don't realize that owner financing is even a viable option nor do they know how beneficial it is for them. Use the benefits as part of your negotiations and rapport building strategy to increase your chances of a seller saying yes.
Some of the reasons of why a seller wouldn't want to hold financing or why it might not make sense for them to do so:
1. They're planning a 1031 exchange of the proceeds into another income property
2. They have an immediate need for the cash and can't wait. This could be a emergency medical condition, maybe legal fees for a court battle they're involved in, or one of many other things why people need cash
3. They don't trust or feel comfortable with you or just can't wrap their mind around the idea
4. Their friends, family, realtor, CPA, Attorney, or someone else who is influential in their life told them it was a bad idea.
Now that you have the benefits, it's up to you to sell them to the seller. Good luck!
Direct download: final_edited_show_episode_12.mp3
Category:general -- posted at: 1:00am EDT