To give you an idea of how to find seller-financed properties, let's first take a look at the various reasons why investors sell their properties. We'll start with the owners who are most likely to finance their property. First, some investors want to sell their property and have a regular monthly income afterward. This, for the seller, represents a nice way to retire and have a steady income of principal and interest. This kind of purchase can be good for the seller who wants the income and for the buyer who wants the investment property.
You may encounter situations where the present owner has done a very poor job of tenant screening and they have a real issue with having bad performing tenants. Often, this is due to the fact that they either are unskilled in the art of screening their tenants, or they may have chosen a shoddy company to to provide data. A good Tenant Report is mandatory for landlords who need to make good decisions about their potential renters. There are so many companies that do not provide nationwide data, or their background info is so outdated, that it is basically worthless. Old information is stale and cheap. The key is to have updated court records with nationwide coverage of all 50 states. This should provide you with criminal history, civil judgments, evictions, foreclosures, liens, and credit history with a FICO score.
Then there are investors who have bought on a contract-for-deed or assumable mortgage and will resell and transfer that contract or mortgage, take a profit, and move on to bigger and better things by buying larger rental units. This is a way for investors to upgrade their investment and improve their financial future. Other investors just plain get burned out and tired and want to get away from real estate. They no longer want to deal with tenants, tenant complaints and problems, the financial obligations of real estate, and the work that goes with management of the property.
Most of these investors have spent a number of years in the business, and now they want to reap the harvest, so to speak; that is, they want to spend their money on the luxuries of life because they have effectively learned how to utilize a tenant report. This kind of seller is quite common in the real estate business. Age plays a part in deciding when it's time to quit. Some investors, as they get older, are no longer interested in taking on tie responsibilities of management and believe it's a good time to find a reliable buyer. This kind of seller is usually very good for the buyer because, for the most part, the seller doesn't want to give up total interest and so will work with the buyer to enhance the property.