A property can become more attractive when there is owner financing available. You should be aware of some of the side effects that come with this type of incentive. Properly marketing and managing your owner financed property can make it one of the most valuable deals on the market right now.

Owner financing means that the owner of a piece of property is willing to manage the debt on the property with the new buyer. So, lets say Bill wants to sell a property for 150,000 dollars. He will owner finance. Which means that if Bill decides he will owner finance Jane, then she can buy the house. Jane pays Bill. The house payments will be handled by Bill.

This is extremely attractive because it eliminates the classic mortgage application. Jane may have to give Bill a down payment or he may want to check her credit, but she isn’t going to have to automatically come up with 20 percent down or have perfect credit. The terms are up to Bill. But, Bill is ultimately the one responsible for all the payments on the property until Jane closes out the loan.

This is also a really good situation for Bill too though. He will probably be able to sell his property for more than what its worth on the market. Because of this Jane has far fewer buying options than most people. She will more than likely be willing to pay a little bit more for the owner financing option. In today’s market where very few qualify for credit with banks, owner financing will definitely help you flip a house faster.

Of course, you should always be careful when owner financing. In order to protect themselves, Bill and Jane are going to need some legal documents. You need to get a lawyer to help you draw up the right documents. These will ensure that Jane gets the house as soon as the debt is paid. So in case Jane quits paying the loan, Bill is protected.

So regardless of the economy owner financing is a wonderful way of attracting buyers and can make real estate investing work no matter what the economy is.