Guidance sort

We currently have a home worth $330,000 but with mortgage and line of credit we have very little available to us.

We are looking to buy a $500,000 home (was originally listed $515,000). The owner is willing to do owner financing over a short duration (2 years).

We wish to keep current home as a rental.

My questions are:

  1. How and where do we create a promisary note for $50-100K and what sort of terms should be offered to make it attractive?

  2. We would like to keep the monthly payments as low as possible for the 2 year duration so we are looking at a ballon payment to seller at end of 2 years. Again what sort of terms would create a win-win situation.

Any thought would be appreciated.

Using a $300k house as a rental will be a bad idea, seriously cash flow negative in 99 times out of 100. You might want to rethink your plans.

I agree that holding a $300,000 property as a rental may be a stretch.

To answer your other question. If you have a seller willing to carry financing you want to go for terms or price. Ideally both. It will depend how motivated he is.

For example you could offer to give him full price but at 0% interest. Don’t need to ask for 0% interest a better way to say it is to ask that 100% of your payment will go towards purchase price.

I did that once, and the interest (4%) was accrued and added to the loan balance, just like a negative amortization loan or an equity credit line.