Sources for Down Payments when Selling via Owner Financing
Posted on October 29, 2009 by admin
In today’s market, acquiring financing has become a challenging issue for a number of potential buyers. To avoid this challenge, I’ve incorporated owner financing as my exit strategy for a number of my homes. This strategy works well because there are a number of buyers that can afford the home. As an investor, we make a bulk of our money on the down payment. So it is very crucial for an end buyer to put down as much as possible for the down payment in order for investors to make the deal feasible for them. A lot of times, we as investors must stimulate the buyers mind so that they realize that they have funds available in different resources. Below is a list of sources for down payments.
- Recently Sold Home
- Family member to buy with them: Use same list to identify where the family member may have there money available.
- Retirement Vehicles: IRA, Roth IRA, SLP
- 401K: Most 401K’s allow the clients to borrow large percentages for purchasing a home. The money borrowed must be paid back.
- Credit Cards
- Gifted Money: Family, Agencies, Charities, Fund Raisers
- Inherited
- Large Bonuses/Commissions
- Stock Market: Selling your stock
- Personal Loans: Bank, Family, Friends
- Personal Money Saved: Savings account, CD account
- Equity in existing Home: Old home going to be a rental
- Equity in rental Homes
- Trade Lazy Assets: Lazy assets includes anything they are not using that has value. This can be silver (chinaware & silverware), gold, Jewelry (Rolex, diamonds, pearls), cars, boats, antiques, collectibles (baseball cards, sports memorabilia, stamp collection, coin collection)
Using this list to stimulate your buyers can create more of a down payment for your owner financed and lease option deals, thus earning you more cash upfront.
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2 Responses to “Sources for Down Payments when Selling via Owner Financing”
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Rachel
- 4th Nov, 09 05:11am
When you have leverage with your buyers, you can start to ask for slightly more exorbitant things – such as large, non-refundable down payments. You are also able to hold out on a buyer in order to get the actual value of the property you are dealing, rather than settling for a lower offer from a buyer that is trying to weasel their way out of paying the accurate property price.