For those of you that are selling properties with owner financing (contract for deed, installment sale, land contract, etc ) , then I want to share something with you:
Would you like to increase the amount you are getting on your down payments??
I took the averages of our last 22 contract sales (selling with owner financing), and I found a very interesting number. Our average down payment from those properties is 11.11%.
This is much higher than the down payments that I see advertised online such as Facebook marketplace, websites, and craigslist. And there is only 1 difference:
WE DONT ADVERTISE OUR DOWN PAYMENT AMOUNT.
We always say : “substantial down payment” or if its a fixer upper, then : “reasonable down payment”
We let the market tell us what they have to pay down. What if you advertise that you want $7,000 down payment…. and you never knew that the buyer both had and was very willing to pay $15,000 down? You would never know it if you were simply stating your minimums. Why ask for a minimum?
Let the market tell you what they will pay.
Here’s another interesting thing about those 22 properties I sold: ONLY 2 of them were fixed up. This means that 20 of them still needed work, several needing ALOT of work, and we still averaged over 11% down. Imagine what we would get if they were all fixed up.
I looked at the 2 that we did rehab all the way, and those both had down payments of 12%. I believe that if I had offered more properties that were completely rehabbed, our average would exceed that 12%.
If you are listing your minimum down payment amount right out of the gate, then you are leaving money on the table.
Again, let the market tell you what they will pay. Ask them how much they want to put down. You may be pleasantly surprised
I hope this helps