Death Match :) - Renting Vs. Owner Finance

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Some of ya'll probably know by now that I like to seller finance my houses. Usually I buy in cash, or sometimes use OPM for 1-2 years for part of the cost of the distressed house. On houses I buy in cash, typical return is 12-15%. And on the ones with OPM, it's about 10-11%. 

Given that 90% or more of what I see on this board is about rental investing, I think this is a good topic for conversation for people to learn about other options. Some may not like owner finance. That's fine. 

I don't like rentals. I love owner finance.

I first got into this type of REI about three years ago after I was overleveraged on rental properties on the East Coast in the crash and got wiped out. Yep I failed. I swore off real estate because I thought the only kind was rental properties with mortgages and all the landlord stuff.

Then I came out here to Texas and learned about cash flow with no maintenance. My first deal here I make about 15% ROI holding the note on this house that has been rehabbed by the buyer.

This style of REI surely won't work in every market, and you have to qualify your buyers per the Dodd Frank rules. Use a RMLO to be 100% certain you are in full compliance with the law, and check the usury laws in your state. Dodd Frank does set up a 120 day foreclosure rule, so make darned sure you get yourself a properly qualified buyer so you don't have to foreclosure.

You also need cash or access to cheap OPM to make it work.

But for me, this style of investing has been a triple blessing - straight cash flow, no headache and stress of being landlord, while affording hard working people the chance to stop renting after 10 years or more.