Traditionally in real estate, it was common that sellers who could afford to would take back owner financing on their property. In other words, they would be the bank or a partial bank for the sale of their home. It hasn’t happened in the past seven years or so because it wasn’t profitable to take back the note. But now that mortgage rates have moved back up, it’s potentially more profitable to finance the purchase from the buyer than it is to take the proceeds. For the buyer, closing costs drop to a fraction with a seller financed loan. It’s not all coming up roses though. Clark has done owner financing many times in the past, and he’s had a good history with it. The risk is always that the buyer doesn’t pay. Clark had one buyer who didn’t pay and he had to foreclose on the property. So, you don’t do this unless you’re getting a substantial down payment from the buyer. Don’t lend people more than 80 percent of the purchase price. That way, if a deal goes south you still have 20 percent of the property and you can turn it around. Secondly, you cannot allow people to get slack on rent. Make sure your buyer knows that you will use the full extent of the law to get your money. Also, establish limits on when pre-payments are allowed. Clark allows pre-payments only on the anniversary of the note. That way the calculations are easier.