Owner financing can make a property extremely attractive. However, with this incentive can come some interesting side effects that you need to be aware of. Properly marketing and managing your owner financed property can make it one of the most valuable deals on the market right now.

Owner financing is when the owner of a property will manage the debt on the property for a buyer. A good is example is that Bill wants to sell his house for 150,000 dollars. He says he will owner finance the deal. Which means that if Bill decides he will owner finance Jane, then she can buy the house. Bill takes the payments from Jane. The house payments will be handled by Bill.

There is not mortgage application needed for this type of deal. Bill may want a substantial down payment or check Jane’s credit, but she is not automatically going to have to produce 20 percent down and a sterling credit score. Bill makes up all the stipulations of the loan. However, until Jane finishes paying on her loan, Bill is really the one in charge of making payments on the property.

This is also a really good situation for Bill too though. He can likely sell his property for more than market value. Which is because Jane has fewer buying options that the people who buy in a more traditional fashion. She is likely to be willing to pay a bit more for the owner financing option. Owner financing can really help you flip a house quicker, because in the market today few people are qualifying for credit with traditional lenders.

When you deal with owner financing you need to be careful. Bill and Jane are going to need legal documents in place to protect their interests. You should get a lawyer to help you with the legal 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.

Owner financing is a great way to attract buyers and make real estate investing and even flipping work in many circumstances regardless of the economy.