Here is the tricky part in your situation. If you are providing partial seller financing (assuming you leave the remaining for them to get funded by conentional lending standards) the 1st lien lender has a say so in how the seller 2nd is structured and can dictate how much the payment and interest rates are created. This will directly affect the customer’s debt ratio.
I say all this to state that you have a goal of financing a pool for yourself and require your payment to be covered and hopefully your seller financing note will cover such. You may walk into the deal assuming you have full control when your not in control 100%. Most lenders in structuring seller financing notes are flexable to a certain extent.
All of this you will have to keep in mind when putting your deal together.
I have a rental I am selling, a buyer approached me and asked about some owner financing. Here is the questions I have, I hope someone can help.
I owe 50K , the asking price is 70K. Buyer is offering 62.5K. I would really like to get 69-70 for it so i am offering back some owner financing,like 19-20k in financing. How does the note get structure, who makes up the note and amoritization schedule, etc ? What interest rate should I use, what length and terms, should I balloon it after 5 or 7 years ,etc ? Our goal with proceeds of the sale is to get a pool. So the note payback would have to cover any pool fincancing we would do. Is this smart way to go about this deal? He get’s what he wants, and we get what we want. Also is this transaction sunbject to capital gains, I am making no money on the sale with a payback of 50K, but what about the other second mortgage we will hold on the house , how is that money taxed ? Sorry for the long post, thanks in advance for any advice or opinions.