We are interested in making an offer involving owner financing. Current owner wants 50% down and 6% but we will negotiate. What are common terms?ThanksKirsten
Common terms are whatever you and the seller agree to “in common.” It can range from zero down and low interest rate to 50% down and 6% interest in this case. I do not think that anyone in the forum can advise you credibly about a park which we know nothing about.Howard
If the seller wants 50% down and 6% I would start at 25% and 3% or less depending on the property. There really is no such thing as “common” but once you know what he wants you always start below market.Negotiating is the best part of purchasing properties but prepared to walk on the deal otherwise you have zero leverage.
Until you sign a contact you are in the driver’s seat. Negotiating till you are VERY comfortable with the terms and them make sure you have plenty of elbow room if you overlooked an item.
The conventional banking world sits at 20%-30% down and 4%-5% interest. If the owner’s property doesn’t qualify for bank financing, then what makes them think that any new owner should put that much skin in the game? Unless the price is incredible, 50% down doesn’t make any financial sense. Without specifics about the deal, it’s hard to give much of an opinion though.