Seller financing that actually closes
Seller financing has a reputation problem because people pitch it as a way to buy property with nothing. That framing loses deals. The framing that closes is simpler: the seller has a problem, and the structure is the solution.
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Find the real problem
A seller who wants full price but needs income takes a note with a fair rate and holds the paper. A seller worried about taxes spreads the gain across years instead of eating it in one. A tired owner who cannot verify their own books takes an earnout tied to collections. In every case you traded terms for price or certainty, and both sides can say out loud what they got. My four-pillar qualification from the book applies here: motivation, condition, timeline, price. The structure answers whichever pillar is screaming.
The checks that keep it honest
Before you fall in love with a structure, confirm the senior loan allows it: transfer restrictions and additional-debt clauses kill more creative deals than sellers do. Put every payment, balloon, and default cure in writing with qualified counsel, run title and insurance like a normal closing, and never let creativity hide leverage you could not survive. A clever structure on a deal with no margin is just a slower way to lose.
Done right, seller financing is the friendliest debt you will ever have: a lender who knows the property, wants you to win, and answers the phone. Solve their problem, disclose yours, and close.
Why sellers say yes to carrying paper
Because you solved something. A seller who needs income more than a lump sum wants a note. A seller facing a large tax bill on the gain wants it spread over years. A seller with a tired property and no buyer at their price wants their price, and terms are how they get it. Seller financing is not a trick for buying what you cannot afford; it is a structure for giving the seller something the cash buyer cannot.
Price and terms are two different negotiations. Give one to get the other.
The structures that actually close
A seller note behind a bank loan, ten to fifteen percent of price, interest-only or lightly amortizing for five to seven years with a balloon. A full seller carry when the property is free and clear and the seller wants an income stream. A master lease with an option when the seller is not ready to sell but is ready to stop operating. Each is a paragraph of legal work and a lifetime of usefulness.
My rule
If I cannot explain the structure to the seller, my attorney, and my lender in three sentences each, it is too clever. The deals that closed and stayed closed were the simple ones, where everyone could say in one breath what they got and what they gave.
A deal that only worked this way
A tired owner wanted a number for his building that no bank would support on the income. Cash buyers had walked. What he actually needed, when I asked, was to stop managing it and to not take a tax hit all in one year. So I offered his number: twenty percent down, the bank at sixty, and his twenty carried at a fair rate over seven years with a balloon. He got his price and an income stream. I got a building at a price the income could not have supported in cash, with a payment the income could support. The bank approved the subordinate note because it was written correctly and the down payment was real.
Nobody was clever. Everybody could explain what they got in one sentence. Two years later the rate increases had grown NOI enough that the refinance paid off his note early, and he called to thank me, which is not how most seller relationships end.
What to do next
On your next conversation with a seller who is stuck on price, ask one question before you counter: what happens to the money when you sell? The answer tells you which structure to bring, and half the time it is a structure that makes their number possible.
