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FSBO – For Sale By Owner – Asked to Carry a Note

This is a typical scenario for FSBO’s and if they’re willing to be flexible, they can often create a winning transaction in today’s market:

Hi, Dawn:

Thank you for the wealth of information in your website. I’ve learned a lot, but I still have so many questions.

I’ve been trying to sell my rental property in California for a few months now. It has 2 houses in 1 property, about 2/3 ac, in a good neighborhood, built around 1940s, great rental income ($1,775/month), etc. I have it listed at Craigslist for $299,000 and I have an FSBO sign in front.

I’ve been getting a lot of interest, but almost all of them ask if I will carry the note. I don’t know much about this, only that it sounded really scary. When I tell them that I am not interested in carrying the note, I never hear from them again.

What should I do?

My current mortgage on it is about $256,000 (about $1,600/month not including property taxes and insurance). I’ve only been paying the interest and the interest will be increasing (I think) next year.

I listened to your 9-minute video, but I’m still undecided what I should do. How does seller financing work? Should I modify my loan to a 30-year fixed before I do seller financing? If the buyer gives me a down payment, what should I do with it? If I sell the note, will I need to pay my current lender the entire amount that I owe? So should I keep the down payment just in case I’ll need to pay off my entire loan or can I use it to purchase another property? How long should I hold the note?

How much do you charge to handle the seller financing transaction? I appreciate your advice. Thank you.

Regards, Flor

Hi Flor,

Yes, offering seller financing is really a powerful way to move a property in today’s market, and you need to seriously protect yourself and use the right strategy.

It sounds to me like you should probably get good long term financing in place (especially if it’s †easy for you to do), then you can pass that on to a potential buyer through the Title Holding Land Trust.

You should get some cash at closing, and a perhaps some positive cash flow each month.  It depends on how we structure everything.

You would start by hiring me as a consultant.

Dedicated to help you empower yourself in today’s market,


SFOS smallBe sure to sign up for: Seller Financing on Steroids:  Pumping Paper for Power, Peace and ProfitsDefer capital gains & sell fast for top dollar, regardless of market conditions (and have a note that’s worth something!)

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