What's better - my money or seller financing? - Posted by Tim

Posted by Gary on February 28, 2001 at 20:16:53:

I like to use common sense with real estate and not make things complicated. If I can cash flow $200 without using any of my money (I consider taking equity out of my home as using my own money), I would go with that over borrowing against my own home, even if it meant getting a lower cash flow because seller financing carries higher rate. I would rather default with seller then my bank on my home equity loan.

What’s better - my money or seller financing? - Posted by Tim

Posted by Tim on February 27, 2001 at 13:53:04:

I have the ability to put down 10% on a 3-family property. If I do this, it leaves me with plenty of cash for a couple of other properties I’ve been looking at (I have a home equity line of credit). What’s more advantageous to me; putting up 10% of my own money or trying to get the seller to carry a note for the downpayment? My thoughts are that the seller will probably want a higher interest rate to carry the note - maybe 10 to 15%. My home equity line of credit charges 8% interest. I don’t consider this too high. Obviously, I could get into a property much easier with using my own money but I just don’t want to go down the wrong path. Am I missing something? With using the Home equity line of credit, I feel that I’m not being too creative to do this deal. Maybe that’s a good thing, I don’t know.

Any thoughts would be greatly appreciated. Thanks