Average Joe Seller Financing

[Ron Kelley]

Hello All,

I would like to get input/strategies (that worked and that didn't) from the community on how to approach the average home owner who owners their resident free & clear to see if they would be open to seller financing.

Ciao,

[Jack Bobeck]

Do they need the money now? Are they comfortable paying a Capital Gains Tax Rate of X % compared to paying their tax rate on earned income? It is all based on what their need is, right now. If they have to sell to have the money, NOW, then Owner Financing is not going to work, but you can find people, mostly with online ads, direct mail, websites, who will find you who have the need to sell and who will allow you to carry back the note. I find many multi-family owners are willing to do this, as the market here in NE Florida for Multi-family has not caught on fire as of yet.

[Ron Kelley]

Jack, thanks for posting.

My question is geared more towards me as an investor asking a home owner who owns their home free and clear if they would be willing to owner finance the purchase, what would be the best way to approach a home owner who may know nothing about owner financing?

[Account Closed]

Ron,

If you find owner finance how much cash are you giving the owner to do the owner finance?

Joe Gore

[Ellis San Jose]

Or you can give them a written offer with seller financing.

Every seller has a different need & situation.

Surely the written offer will open up a conversation for you to find out more.

[James H.]

You need to have enough knowledge on how you would owner finance a house to someone else before you can sell the idea to a seller. Otherwise, how would the conversation go?

Once you know how owner financing works (not just the general idea, but the nuts and bolts), you can walk a potential seller through the process and then they can decide if they want to do it.

The down payment and terms of the loan are all negtiable and will vary from deal to deal depending on what everyone's wants and needs are.

[Ron Kelley]

@Account Closed

Joe that will all depend on their needs and circumstances.

[Ron Kelley]

@Ellis San Jose

Thanks for the suggestion on how to start the conversation, how Ellis determine a offer (baseline) that wouldn't insult the seller/owner? :)

@James H.

Thanks James, do you have any recommendations in the way of lecture, videos, etc in the way of learning the "nuts and bolts"?

[Ellis San Jose]

Never fear the word "No" from a seller.

If they say no, ask them what they will say "Yes" to.

Get all the pertinent facts.

What do they want?

What do they need?

What is their deepest pain that they want relief from?

What is the property worth today?

How much income can the property create?

What is the net equity in the property?

The property will determine what you can pay, it's very objective not personal. I simply present the accurate data.

I take the mindset that they have to convince me to buy their property. Not the other way around.

[James H.]

Originally posted by Ron Kelley:

@James H.

Thanks James, do you have any recommendations in the way of lecture, videos, etc in the way of learning the "nuts and bolts"?

Best way is to contact a title company that has a lawyer on staff that can draw up the contracts. They can tell you what all is needed and what your options are.

It is easier if you have already established a relationship with the title company (usually by means of having used them for a closing) but if you have a sure deal in the pipeline, they may talk to you about it if you take the business to them.

[Ron Kelley]

@Ellis San Jose @James H.

Thank you for taking the time to post!

[Brandon Krieg]

I agree with @James H. . Often, I will discuss seller financing as an option (along with a cash sale), and explain that they can typically make more money overall, but get their payments spread out over time. For some, this is a relief, and others just want to cash out.

It helps to know the pros and cons of the different strategies, such as subject-to, lease options, wraps, etcetera. If you'd like some starting points, PM me and I will shoot you some good resources that I used in the past.

[Bill Gulley]

Originally posted by Brandon Krieg:

I agree with @James H. . ........It helps to know the pros and cons of the different strategies, such as subject-to, lease options, wraps, etcetera. If you'd like some starting points, PM me and I will shoot you some good resources that I used in the past.

Brandon, if you are not soliciting, why not post the information in the thread for everyone. Then everyone can discuss the tactics. :)

[Ron Kelley]

@Bill Gulley

Thanks Bill, just sent you a request.