When I take my group of folks around and look at properties there
will be quite a few that will have owner financing as a possibility.
Why?
Many reasons actually and some you should use when you are
working on your purchases right now.
1. Rate of return. A rate of 6% – 8% on a owner carried note
or mortgage is a decent return these days compared to what
money is doing in other places. Good argument.
2. Good Argument #2. Financing With Banks. I am not kidding when I
tell you this. I have had a bank sit on one of my clients
requests for financing now over 3 months THINKING about doing
this deal. They won’t say YES or NO. Right now many lenders
are being knee jerk conservative and a project that may
have been easy to finance a year ago all of sudden may not be.
A good reason for an owner – if they truly want to sell – to
go with owner financing.
3. Capital Gains Taxes. Now when an owner sells a property on
an installment they do not get out of capital gains taxes BUT
they do get to pay the taxes as they receive the payments –
therefore paying their tax over time vs. all up front.
4. Good Cash Flow – No Management. The other good argument
here is the owner gets a monthly check – for the same amount –
month after month with no work or management at all. They just
collect payments of predictable cash flow.
Use these as your arguments in your quest for owner financing. Right now is
one of the best times to get it done!
Boyd McClean
www.noteswilltravel.com