owner finance or land contract?

Which way would be better to go with? Should I go with owner financing or a land contract? The building is selling for 35k 5 family owner just wants out he is willing to do either one. Which is the best way to go and what are the costs for closing involved with each.

The advantages for a land contract are all for the seller. If you default on the contract, it makes it easier for him to take the property back. For my money, do an owner finance if you have the choice.


While owner financing is great for the seller its also great for the buyer. The buyer pays no origination fees, no junk fees, survey fees, no PMI, etc. etc. Usually the seller likes to see some type of dp, but in this case if he doesn’t need it then consider yourself lucky. The seller and yourself agree to terms and have it drawn up by an attorney. Maybe he pays for that, or you do, or you just split the costs. In the note will be the term of the note, interest rate, any balloons, any prepayment penalties, etc. Remember if you are the note payor you can always refinance just like you could with a bank loan. Hope this helps.

Nate Andree

Thanks for the help. I am going to go for the owner financed and get the full benefits of it. Generally what are the costs involved woth the closing process in this situation?
thanks again

If you can do owner financing also ask for non recourse against you personally. You also want a discount if you can pay it off early. Like 10% if you can pay within the first year. Also the first right of refusal he he ever wants to sell the note.
A substitution of collateral clause is also nice to have.

Periodically you will ask if he will conceed on interest if you may more or discount for a full payoff.

If you provide the note these things can be in it. It can make you thousands.