Seller finance is when the buyer pays the seller directly instead of going to a bank for the money. In most cases there is a balloon payment. A balloon payment is when the buyer after paying the seller directly for a certain amount of time, pays off the promissory note in one lump sum. The buyer usually goes to the bank and gets a mortgage to pay off the seller. Some things a promissory note should have on it are the monthly payments, interest rates, penalties, and when is the balloon payment due if any.
One last contract you can use when investing in real estate is a lease. A lease is used when renting out properties. The things a lease should have on it are rules, penalties, rent amount, when rent is due and when rent is late. When investing in real estate contracts are a way of life. If you use the information you read here you will have some idea what these contracts are and what they should have on them. |
