You found the perfect little duplex near the healthcare corridor. The numbers work, the seller's motivated... and then your lender quotes you a rate that makes your calculator flinch. Sound familiar?
Here's the thing most new investors don't realize: the bank isn't the only lender in town. Sometimes the best lender is sitting across the closing table from you — the seller.
What Seller Financing Actually Is
Seller financing (also called owner financing) means the seller acts as the bank. Instead of you bringing a mortgage from a lender, the seller lets you pay for the property over time. You sign a promissory note, agree on a price, interest rate, monthly payment, and term, and you make payments directly to them.
No underwriting committee. No 45-day closing timeline. No explaining to a loan officer why you have three LLCs. (Not that I'd know anything about that.)
Why a Seller Would Ever Say Yes
This is the question I hear most, and it's fair — why would anyone play banker? A few common reasons:
- They own the property free and clear. Many long-time Dayton landlords do, especially folks who bought decades ago and are ready to retire from tenants and toilets.
- Steady income beats a lump sum. Monthly payments with interest can be more attractive than a pile of cash earning next to nothing.
- Potential tax advantages. Spreading the sale over years may help the seller manage capital gains — though that's a conversation for their CPA, not for us over coffee.
- A faster, simpler sale. No lender means fewer contingencies and fewer deals falling apart at the finish line.
Why It Works for You as the Buyer
- Negotiable everything. Rate, down payment, term, balloon date — it's all on the table. Try negotiating that with a big bank.
- Speed. Deals can close in days, not months.
- Access. If you're self-employed, newer to investing, or already carrying several mortgages, seller financing can open doors traditional lending keeps shut.
- It pairs beautifully with MTR and shared housing strategies. In my mid-term rentals, cash flow is king — and a creatively structured payment can make a marginal deal a strong one, especially near Wright-Patt or the hospital networks where furnished rental demand stays steady.
Where People Get Burned
Seller financing is powerful, not magic. Watch for balloon payments you can't refinance in time, verbal agreements that never make it into writing, and sellers who still owe on the property (that existing mortgage likely has a due-on-sale clause — know what you're getting into). Always use a real estate attorney and a title company to paper the deal properly. One sentence of legal advice: this is not legal advice — consult a professional before you sign.
What to Do Next
- Pull a list of long-held, free-and-clear rentals in your target Dayton neighborhoods.
- When you talk to sellers, simply ask: "Would you consider taking payments?"
- Practice running the numbers on a seller-financed deal — down payment, rate, term, balloon.
- Line up an investor-friendly attorney before you need one.
The best way to get comfortable with creative financing? Talk to people who've actually done it. Bring your questions to the next GDREIA meeting — there's a good chance someone in the room has closed a seller-financed deal and will happily tell you every detail.
Roslyn Harris is a real estate investor and owner of RosCole Homes, LLC, specializing in mid-term and corporate housing rentals in the Greater Dayton market. She serves as Magazine Chair for the Greater Dayton REIA.