Seller Financing
Creative FinanceSeller financing — also called owner financing or a seller carryback — is when the person selling a property or business lends you the money to buy it instead of making you get a bank loan. You sign a promissory note (your promise to pay), it’s secured by a mortgage or deed of trust, and you pay the seller monthly. The seller becomes the bank; you become the owner from day one.
How it works. You and the seller agree on price and terms — down payment (often $0), interest rate, monthly payment, loan term, and whether there’s a balloon. At closing, the deed transfers to you, the seller holds a lien, and you pay them monthly — usually through a third-party servicer. The seller benefits from installment-sale tax treatment (they’re taxed only as payments arrive, not on the whole gain at once) and a steady income stream. You get ownership, depreciation, appreciation, and equity buildup with little or no money down.
| Line item | Amount |
|---|---|
| Property price | $110,000 |
| Down payment | $0 |
| Interest rate | 0% (principal-only) |
| Term | 20 years (240 payments) |
| Monthly payment | ~$458 |
| Tenant rent (income) | ~$1,650/mo |
| Net cashflow before vacancy/maintenance | ~$1,192/mo |
Say “principal-only,” never “zero interest.” Frame the structure around what the seller needs each month, not around an abstract interest rate.
Seller financing is the most common no-money-down structure for buyers without a US SSN or bank approval — it’s a private contract between two people. For the complete playbook, see 100% seller financing.