Mortgage or Owner finance?

What are the pros and cons of Mortgaging an apartment building or Owner offering financing?

I know that owner financing is negotiable but what kind of terms should I look out for?

The pros are that usually you can structure the financing any way you want. And sometimes even negotiate deferred payments or really low interest rates.

The cons are (in my experience) that the seller’s are a little “too up in your business” when they are carrying financing. They can see your financials and credit and tend to be micro-managers if they haven’t done it before.

The other problem is that if you are asking for the seller to carry back a 2nd and putting a new 1st mortgage on it, commercial lenders are not that psyched about it. They’ll usually reduce the LTV of the 1st offer by at least 5% OR make you put the 2nd on another property on your portfolio instead of the subject and most sellers would freak out at that.