I am thinking about creating a seller financed note.

I am selling a rental house and the last potential buyer couldn't obtain a new loan from the bank.
My real estate agent said I should offer seller financing and carry the note for the buyer.
Obviously, this would facilitate a quick sale of the property. But, I am not sure I want to carry the note for the next 20 years.

My real estate agent says that I could take a 10% down payment and get a good return of 5% interest rate. He says that should I want to sell this note, it would be very simple to sell the note to a note buyer.

Is this accurate? Is the real estate agent shooting straight with me?

A: Nope.

Typically, the agent is looking out for their commission, not your best interest.

With only 10% down payment (and realize 6% will go straight to your agent), this small down payment will prevent a note buyer from buying the entire note from you. The reason is that the loan to value of 90% is just too high for a note buyer.

5% interest is better than you could earn in a CD, but most note buyers are going to be in the 10-18% yield range. Which means you will be taking a decent hit even on a partial note sale.

Will seller financing enable you to sell the property quicker? Yes.

Will you be able to sell the note for 95-100 cents on the dollar like most real estate agents suggest?

No way.