How to Sell Land with Owner Financing (and Cash Out Your Land Note)

Selling land with owner financing can help you move properties faster and at better prices—but it also means waiting years to collect your money. In this guide we’ll walk through how owner-financed land sales work, how to structure a strong land note, and how you can cash out your future payments up front.

Why Use Owner Financing for Vacant Land?

Vacant land is harder to finance through traditional banks. That’s why “Owner Will Finance” listings stand out.

Offering seller financing can help you:

• Attract more buyers. Many good buyers can’t get traditional land loans.

• Sell faster. Owner-financed land often moves 2–3x quicker than cash-only listings.

• Get your asking price. Cash buyers want a discount; financed buyers are more flexible on price.

• Earn interest income. Instead of one check, you create a monthly income stream.

The trade-off? You’re waiting 5–10 years to be paid in full—and you’re taking on the role of lender.

Step 1: Understand What a Land Note Actually Is

When you sell land with owner financing, the land note (promissory note) is the buyer’s written promise to repay you.

A typical land note spells out:

• Purchase price and loan amount

• Down payment

• Interest rate

• Monthly payment amount and due date

• Term length and balloon date (if any)

• Late fees and default terms

The note is the buyer’s IOU. It’s separate from the deed of trust or mortgage, which is the document that uses the land as collateral.

Want a deeper dive into land notes and terminology?

Step 2: Protect Yourself With the Right Collateral

In a well-structured seller-financed land sale, you’ll usually see:

• Promissory Note – the land note itself

• Deed of Trust or Mortgage – recorded against the property

• Warranty Deed – transferring the land to the buyer at closing

This structure:

• Gives the buyer the deed so they feel like true owners

• Gives you a recorded lien, so you can take the land back if they default

• Makes the note much easier to sell or refinance in the future

We generally avoid land contracts / contract for deed structures because they’re harder to enforce and harder to sell later. A clean note + deed of trust is more marketable.

Step 3: Structure a Note Investors Actually Want to Buy

If you ever plan to sell your land note, think like a note buyer from day one.

Things that make a note more attractive:

• 20%+ down payment

• Balanced term (5–10 years vs. 30-year land note at a low payment)

• Clear, fixed interest rate

• No extremely tiny payment amounts that drag the term out forever

• A buyer with documented income and a clean payment history

You still have flexibility, but the closer you are to this profile, the easier it is to sell the note later and the higher price you can command.

Step 4: Decide if You Want Income or a Lump Sum

Once the note is created, you have two basic paths:

1. Keep the land note

   • You collect the monthly payments over time.

   • You earn interest but carry all the risk and the servicing.

2. Sell the land note

   • You trade some of the future interest for immediate cash.

   • You’re out of servicing, bookkeeping, and default risk.

A simple example:

• Sale price: $80,000

• Down payment: $16,000 (20%)

• Note balance: $64,000 at 10% interest

• Term: 10 years

Over 10 years, total payments might be ~$101,000. But if you sell the note, you might receive 80–90% of the remaining balance today, plus you already collected the down payment.

How a Land Note Sale Works With Damen Capital

Here’s what the process typically looks like:

1. Share the details. You send basic info about the property, buyer, down payment, note balance, term, and payment history.

2. We underwrite the note.We review the note structure, collateral, and risk profile.

3. We make you an offer.If it’s a fit, we present a written offer to buy the note for a lump sum.

4. You close and receive cash. At closing, you assign the note and deed of trust, and we wire funds.

Ready to see what your land note could be worth? Get a Free Land Note Quote →

Common Mistakes to Avoid When Selling Land with Owner Financing

• Weak or missing documents. Handshake deals or half-finished notes are hard to enforce and hard to sell.

• Very low down payments. The less skin the buyer has in the game, the higher the default risk.

• Overly long terms with tiny payments. Looks great on paper but ties up your capital for too long.

• Using a land contract instead of a note + deed of trust (in most cases).

If you’re not sure whether your structure is “note buyer friendly,” get a second set of eyes before closing.

Next Steps for Land Sellers

If you:

• Own land you’d like to sell with owner financing, or

• Already hold a land note and want to explore selling it

…Damen Capital can help you run the numbers and see what your best options are.

• Learn the basics: What Is a Land Note?

• See how note sales work: Vacant Land Note Buyer

• Or skip straight to a quote: Get a Free Land Note Quote →