Seller Financing : How To Offer It Safely & Efficiently
Article by Tim Houghten Photograph of Sarah Montes , Executive Director of Texas Pride Lending
Seller financing is trending . The big question is : How can investors navigate this strategy safely , efficiently , and optimize profits in the process ?
Owner financing of real estate appears to be on the rise again , and may continue to soar in popularity for several years . Yet , real estate investors face fresh challenges and uncertainties in the legalities of this type of private financing , all while being under more pressure to be efficient and competitive , and to stay isolated from risk .
THE NEED FOR SELLER FINANCING IN 2017 & BEYOND The prevalence of seller financing dipped after the market came roaring back and cash buyers saturated the market . Now many investors have capital tied up in equity , and all cash buyers are declining as a share of the market , according to the latest data from NAR and RealtyTrac . At the same time , hopes of President Trump creating a new era of easy borrowing for regular home buyers haven ’ t materialized . At least not yet .
Meanwhile , home prices are high , interest rates are trending up , trust in banks and institutional mortgage lenders remains at dire lows , and the rental market is very competitive . That means investors hoping to resell their properties or turn them into cash cows need to have other strategies and tools at their disposal . Buyers who want to take advantage of the current market , or to kick high rents to the curb , must look for seller-financed options .
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