Have you ever heard of seller financing? I have. In fact investors always talk about it as a great thing which makes properties oh so more attractive to your buyers. I understand the basic concepts and the mechanics of what seller financing is, but what I never really grasped was how can an investor pay more for a property using seller financing then they could by paying cash for the property.
What is Seller Financing?
For those that aren’t quite clear on what seller financing is, it’s when the seller of the property agrees to take payments for the property, spread over a period of time, instead of one large payment. You basically are getting a mortgage from the seller instead of a bank.
For more information plus the pros and cons of seller financing go to wikipedia
How Can Seller Financing Allow You To Pay More?
This is a question that I’ve been wondering for the longest time. I’ve asked some people here and their over the last few years but the answers where way to complicated for my small brain to comprehend. If you don’t explain things in examples, I can’t following along to well.
I still may not understand it completely, but my brain is slowly putting the pieces together to the point where I understand the general concept (I think) but if I think about it to much i confuse myself. Ever have that happen to you? Happens to me…
I actually spent the last 20 minutes trying to explain my understanding as part of this post but I started to confuse myself and would have certainly confused anyone reading. With that being said, I would greatly appreciate someone, who knows about seller financing, explain how it allows you to pay more money for a house to me or point me in the direction of where I could understand it better (with examples).
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