Question:  "I have a buyer who doesn’t want to deal with the bank.  They asked if I was willing to do owner financing for them – a contract for deed.  He offered a down payment of $10,000 and pay around $700-$750 monthly, and a lump sum amount on a quarterly basis so that he could pay it off within 5 years. He’s a truck driver who owns his own truck company.   We are talking about a price of $79,000. He earns around $7,000 a month with his business.  Where do I go from here?"

Answer: "I would suggest that If you are going to do owner financing for him, you should make a regular monthly payment to the bank as he makes his monthly payment to you.  He won’t get ahead of you that way. 

If he give you an extra principal payment, you should pay it as well to the bank.  This will apply as a principal payment to the house. 

Basically, the loan you have with the bank would always be less than what he owes you.  This is where you can earn some extra cash.  You’ll always have him paying a higher interest rate than you, and a higher sales price.  That’s where the majic comes from owner financing. 

I also suggest that you go to google loan calculator.  Get something to calculate the payment length of time to pay out the amount; calculate it using the actual amounts of money involved."