Convincing seller to owner finance

What is the best approach to selling the idea of “seller financing” to the seller? I thought I would be able to convince a potential seller but then I realized that I was having a difficult time articulating the benefits for the seller.

I sent you some email that I hope helps. Feel free to use it as you like to help your discussions with the seller.



Herman A. Brunson, Jr.
HBInvestCo, Inc.

Yes, that is awesome…just what i was looking for. Tell me the details in the deal are not as scary as I am to think.

Also…can this be worked out if the seller’s original mortgage is not paid off?

I’ve never done one where the seller had a mortgage in place. My thought on that is that if the seller had a mortgage in place then the payment and rate to the seller will be driven by and either equal to or higher than what the seller is paying to their lender. That way the seller can receive your payment and in turn pay their lender.

This works really well for properties where the seller owns the property free and clear.



Herman A. Brunson, Jr.
HBInvestCo, Inc.

In this situation (owner still has mortgage)…would it then be logical to attempt a Sub2?

Could you give me the info on how to convince the seller to do seller financing? We have both leads - where the seller owns it free and clear, but is not very motivated to sell (attached to the property sentimentally, property is vacant, but is being heated, the owner is very old and lives out of state and visits the property couple times a year). Also, we have another EXTREMELY motivated seller, but she has a mortgage. Some people don’t even know that such thing exists and think it’s something off the books, illegal or something.

I agree with your latter statement. That is why I am trying to learn as much as possible in order to sound professional and legitimate. In this economic climate I think a lot of people are afraid of being taken for a ride. Hard to blame them.

i ask them if theyre willing to take payment for a couple of years. most ask, what do you mean by that? i say its just a lease to own arrangement.

i still make offers on properties that have underlying mortgages on them. i just tell them to stay on the loan for 3-5 years and we’d have a tenant/buyer take over payments until they can purchase or resell the property outright.

Ok…so to get it all straight…Owner financing should be used only when the mortgage is clear and Sub2 would be used when the mortgage is not paid off. How similar is a Sub2 from a lease to own?

theyre similar since the financing has to be kept in place, able to control property without qualifying for a mortgage and theyre both good entry strategies.

defcon thats the only way they are similar, other than that they are worlds apart. Sub2’s can be difficult while Lease Option rather simple.
BTW beware the DOSC. Herbster

correct. they have their differences and risks. just as long as youre aware of those risks and you know how to mitigate them.

im very aware of the DOSC. not worried about it since id use title holding land trusts to simulate to lease option

I however am not aware of DOSC…at least the acronym.

DOSC stands for Due On Sale Clause.

Johnooch, You can learn a little about the DOSC from Bill Bronchick at He has a free article about it “there is no DOSC jail”.
You can owner finance with an underlying Mortgage, similar to what defcon says. herbster