On the front pages of newspapers across the country, you read about the slowdown in housing. It’s becoming a buyer’s market. There’s nothing new here; this happens periodically. The real estate market is cyclical: it produces alternating buyer’s and seller’s markets. The seller-financing strategy is an excellent method for adding to your net worth, and the current buyer’s market is the perfect place to implement it.

If you are selling your home or a rental property, seller financing is easy to implement. You simply take a first, second, or perhaps a wraparound mortgage as part of the sale. The benefits of financing and the power of the tax law can make this a wealth-enhancing experience when you implement some of the strategies in this article.

With seller financing, you can increase your net worth in six different ways (outlined below). If you use the six ways to take a 20-year, $100,000 investment and then realize a rate of return of

5%, you’ll accumulate $265,330;

10%, you’ll accumulate $672,750; or

15%, you’ll accumulate $1,636,654.

Seller financing can improve your rate of return from 5% to 15%. With this improvement on a one-time 20-year investment of $100,000, you add almost $1.4 million to your net worth.

Seller financing gives you a high rate of return and investment leverage. It allows you to

raise the selling price of your property,

collect points and mortgage fees, and

collect more interest than you would otherwise receive.

Proper use of this combination can add significantly to your annual rate of return.

Since you know the property you are selling, you know the security behind your seller financing. Should you have to repossess ... Log in to view full article.