What seller financing actually is
Instead of the buyer bringing a bank to closing for the full purchase price, you as the seller carry part of it. The buyer pays a down payment, signs a promissory note for the balance, and pays you monthly under agreed terms. The note is normally secured against the property so you have a remedy if payments stop.
In practice, "seller financing" covers a wide range: a small second position behind a bank loan, a large first-position note where you are effectively the bank, or a short bridge note that gets refinanced within a couple of years.
Why an Arizona owner might consider it
- You want recurring monthly income rather than one lump sum
- You do not need all cash immediately and have no competing use for it
- You want potentially flexible terms on timing, rate and amortization
- The property is difficult to finance conventionally — unusual utilities, incomplete financial records, a seasonal income profile lenders struggle to underwrite, or heavy deferred maintenance
- Both sides want to bridge a gap between price expectation and what a bank will lend
- You want to stop operating the park — the early mornings, the septic calls, the seasonal staffing — while still receiving payments
That last point matters in Arizona more than people admit. Plenty of owners are not tired of owning; they are tired of managing during snowbird season. Financing can separate those two things.
The risks, stated plainly
- Buyer default. The buyer may stop paying. You may then be dealing with a property that has been operated differently for a year or two, possibly with deferred maintenance, unhappy residents or a damaged reputation.
- You do not receive all proceeds at closing. If you need the full amount for another purchase, an estate settlement or a partner buyout, carrying paper may simply not fit.
- Documentation is everything. The note, the security instrument, default and cure provisions, insurance and tax escrow requirements, reporting obligations and transfer restrictions all need to be drafted by a competent attorney.
- Security and collateral matter. Position, personal guarantees and what exactly secures the note determine what your remedy is worth.
- Tax consequences. An installment sale is treated differently from a cash sale. We make no promises here — your CPA should model it before you commit.
- Balloon payment risk. Most notes balloon. If the buyer cannot refinance when it comes due — because rates moved, because lending tightened, because the park underperformed — you are back in a negotiation you did not plan for.
- Interest rate risk. A rate that looks fine today may look poor across a long note. Consider term length, rate adjustment and prepayment carefully.
Terms worth thinking about before you negotiate
- Down payment amount — the buyer's real skin in the game
- Interest rate and how it is calculated
- Amortization period versus the actual term of the note
- Balloon date, and whether extension options exist
- Prepayment rights and any penalty
- What secures the note and in what position
- Personal or entity guarantees
- Requirements to maintain insurance, pay taxes and maintain the property
- Whether the buyer must provide you periodic financial reporting
- What triggers default and how long the cure period runs
- Whether the note can be assigned if the buyer resells
Who to talk to before you agree to anything
An Arizona real estate attorney and your CPA, at minimum, before signing a purchase agreement — not after. Seller financing is one of the few places in a transaction where the documents matter as much as the price, and where a term you gave away casually in a phone call becomes very expensive later.
We are happy to discuss whether a structure like this could make sense for your park. We will not tell you it is the right answer, and we will not make tax representations.
Educational information only. This page is general commentary about buying and selling RV parks in Arizona and is not legal, tax, engineering, environmental, appraisal or accounting advice, and not an offer to purchase. Requirements vary by property, county, municipality and water provider, and they change over time. Confirm anything that affects your property with the applicable Arizona agency and with your own attorney, CPA and licensed professionals.