Owner financing with a small amount down

While speaking with a local realtor, you ask if he knows any vendors who would be willing to sell on a contract with a tiny down payment. There are lots of reasons sellers will choose to sell on a contract rather than taking cash. They might need a monthly income and are prepared to risk a buyer’s default because they do not want the management hassles and expensive property taxes every year. The agent tells you about a 10 acre property, with power and phone on the corner of this property, the vendor has owned for many years and is prepared to forego. The property doesn’t have a record price (since it isn’t recorded) but the seller is going to take a cost of $14,000 with $3,000 as a down payment. The vendor is willing to fund the balance of $11,000 over five years at 7 percent interest, with monthly payments at $218 per month. After taking a look at the property, you decide that it’s some potential. You quietly accept the purchase price and details of the property. You pay slightly more of the closing prices, since the agent has to earn a commission.

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