Owner Financing Question
I read your article on owner financing and it gave me some basic understanding of how it works. My question is – I have a commercial condo the leasee wants to purchase from me and asked me to finance due to his bankruptcy. Can you recommend the interest rate to apply to the seller carry note? He will probably put 20% down. Thanks.
Thanks for coming to our site and I’m glad you found the owner financing article useful. We can’t recommend a specific interest rate to charge the buyer, that’s up to you and the buyer to agree on. However, it’s common to charge a higher rate than the prime rate. I’ve seen rates of 5 – 7% for owner financed properties lately. Keep in mind that typically people who buy properties with owner financing often can’t get approved with a bank, so they expect to pay more, but you also want to make sure they can afford the monthly payments.
All the best,