Seller Financing
A Clear & Practical Overview
Many sellers ask about seller financing, often described as creative financing, so we want to share more information on what this means, how it is used, and why it has become increasingly relevant in today’s market.
Most owners aren’t familiar with how it works so their initial reaction is to reject the idea, often passing on strong offers due to a lack of understanding. Our goal is not to convince you of anything, but rather to provide context and clarity so you can make an educated decision about whether this type of financing model might be a fit for you.
What is seller financing?
Seller financing is a standard real-estate sale where the seller allows the buyer to make payments over time instead of securing a bank loan. Title transfers at closing just like any normal sale and the payments the seller receives are secured by the property.
There are several ways to structure this, but they all share the same goal:
Reduce bank involvement, increase speed, decrease complexity, and keep more of the deal’s value between buyer and seller.
This applies even if when there is an existing loan. Creative structures are commonly built around existing financing.
Why It’s Common Today
Don't let the bank get away with your profit!
In short: banks push prices down because they extract profit from the deal. Seller financing keeps the value between the buyer & seller.
High interest rates today are the biggest reason offers come in lower than sellers expect. Because sellers can offer a more reasonable rate, the deal can support a higher sale price. This provides the seller with a higher sale price as well as ongoing payments, producing a higher total return.
In addition to the financial impact, banks complicate the process. They limit leverage, require larger down payments, tighten underwriting, and often dictate the maximum price a buyer can pay — regardless of what the property is truly worth to the parties involved.
We leverage seller financing to create a cleaner, faster, and more profitable outcome for both sides.
Don't let the bank get away with your profit!
What if i have a loan?
Having an existing loan is not a barrier to seller financing — it’s actually one of the most common situations we see. We typically use a wrap-around (or all-inclusive) deed of trust, where the seller finances the full purchase price while their current loan stays in place. We make one payment each month; part of the payment covers the underlying mortgage and the rest goes to the seller.
To keep everything clean and protected, we use a third-party loan servicer to handle the flow of funds. They withdraw our monthly payment, pay the existing lender directly, and send the remaining amount to the seller. The loan stays current, the equity position improves as the balance drops, and the seller earns the spread between the payment and the underlying loan.
Benefits of Seller Financing
Security & Protection
"How will I be protected?" is the most common question we hear.
The seller’s position is secured by the property itself through a recorded deed of trust or mortgage.
We believe that a seller shouldn't have to deal with headaches if the buyer defaults. Our agreements are structured to give an easy, streamlined remedy upon default. We make the process of taking the property back easier and faster than a foreclosure. In a default situation, any payments made, improvements completed, rent increases, or upgrades performed by the buyer also remain with the property.
We ensure timely payments and accounting by using a third-party note-servicing company that handles all loan payments. They pay the underlying mortgage (when applicable) and send the remaining funds to the seller every month. They also provide transparent statements and communication.
To ensure that everything is executed properly, we only use attorneys and title / escrow companies who specialize in seller financing transactions and thoroughly understand the structure and process.
.
Financial Upside
In addition to receiving a higher sale price, monthly interest income produces a higher total return than a traditional sale, letting the seller earn more over time. Spreading payments out may also allow the seller to defer a portion of capital gains taxes.
The seller gains consistent income backed by a hard asset.
Speed & Certainty
Seller financing eliminates bank approvals and financing committees, removing a major source of delays and uncertainty. Because no appraisal is required, a common cause of last-minute deal disruptions is also avoided.
Fewer moving parts typically results in a quicker and cleaner closing.
Control & Flexibility
Terms of the transaction can be tailored to the seller's goals — including interest rate, timeline, balloon payments, and amortization structure. The seller can balance between monthly income and the overall duration of payments.
The seller's financial, tax, & estate planning needs will be front & center.
Financial Upside
In addition to receiving a higher sale price, monthly interest income produces a higher total return than a traditional sale, letting the seller earn more over time. Spreading payments out may also allow the seller to defer a portion of capital gains taxes.
The seller gains predictable, consistent income backed by a hard asset.
Speed & Certainty
Seller financing eliminates bank approvals and financing committees, removing a major source of delays and uncertainty. Because no appraisal is required, you avoid a common cause of last-minute re-trades or deal disruptions.
Fewer moving parts typically results in a quicker and cleaner closing.
Control & Flexibility
Terms of the transaction can be tailored to your goals — including interest rate, timeline, balloon payments, and amortization structure. You decide the balance between monthly income and the overall duration of payments.
Your financial, tax, & estate planning needs will be front & center.
Financial Upside
In addition to receiving a higher sale price, monthly interest income can produce a higher total return than a traditional sale, letting you earn more over time. Spreading payments out may also allow you to defer a portion of capital gains taxes.
You gain predictable, consistent income backed by a hard asset.
Speed & Certainty
Seller financing eliminates bank approvals and financing committees, removing a major source of delays and uncertainty. Because no appraisal is required, a common cause of last-minute deal disruptions is avoided.
Fewer moving parts typically results in a quicker and cleaner closing.
Control & Flexibility
Terms of the transaction can be tailored to your goals — including interest rate, timeline, balloon payments, and amortization structure. You decide the balance between monthly income and the overall duration of payments.
Your financial, tax, & estate planning needs will be front & center.
Financial Upside
In addition to receiving a higher sale price, monthly interest income can produce a higher total return than a traditional sale, letting you earn more over time. Spreading payments out may also allow you to defer a portion of capital gains taxes.
You gain predictable, consistent income backed by a hard asset.
Speed & Certainty
Seller financing eliminates bank approvals and financing committees, removing a major source of delays and uncertainty. Because no appraisal is required, you avoid a common cause of last-minute re-trades or deal disruptions.
Fewer moving parts typically results in a quicker and cleaner closing.
Control & Flexibility
Terms of the transaction can be tailored to the seller's goals — including interest rate, timeline, balloon payments, and amortization structure. The seller can balance between monthly income and the overall duration of payments.
The seller's financial, tax, & estate planning needs will be front & center.
When it's not a good fit
Seller financing is a powerful tool, even when an existing loan is in place, but it isn’t the right fit for everyone. It may not be ideal if you need all proceeds immediately for a new investment, business venture, 1031 exchange, or if you prefer a complete, immediate exit with no future payment stream.
Some sellers have liquidity needs that favor a lump-sum payout today rather than a longer, larger return, or have financial and estate-planning considerations that require cash at closing instead of installment income.
If any of these situations apply, a traditional cash or bank-financed sale may align better with your goals.
How the Process Works
The process is straightforward. We begin by agreeing on the purchase price and terms. The attorneys then prepare the Promissory Note and Deed of Trust / Mortgage to clearly outline your protections.
From there, we close through a standard title or escrow company, just like any traditional sale. After closing, you simply receive monthly payments according to the agreed schedule, with a balloon payment at the end.
Further Reading / Professional Resources
Read how this attorney explains the basics of seller financing — and why it’s becoming a more common strategy in real estate and storage acquisitions.
Explore how this CPA breaks down installment sales and seller-financed deals — and how these structures can help investors manage taxes, smooth cash flow, and create more flexible exit options in real estate.
Learn how this real estate educator outlines three creative seller-financing structures — and how investors use them to unlock deals, reduce upfront capital needs, and negotiate terms that work for both sides.
Discover how this commercial real estate advisor breaks down creative financing strategies — and why tools like seller carrybacks, master leases, and other flexible structures can help investors secure deals without heavy upfront capital.
let's talk
Ready to have a conversation? Schedule a quick call at a time that works for you. We enjoy connecting with fellow storage operators—whether you're considering an exit, exploring partnership options, or just want to talk shop.
Testimonials
Their team took the time to understand my unique financial goals and risk tolerance, and they crafted a personalized investment strategy that aligned perfectly with my objectives. Not only have they consistently delivered strong investment returns, but they've also provided invaluable guidance and support during turbulent market periods.
John Doe
Programmer
From the moment I engaged with their team, I was impressed by their professionalism, integrity, and commitment to client success. They took the time to educate me about different investment options and helped me create a well-diversified portfolio tailored to my financial goals and risk tolerance.
John Doe
Manager