Finding Seller/Owner Financed Properties???

Question

I am looking to start my buy and hold investing career and I believe the easiest way to get into real estate is through seller financed properties. It will be greatly appreciated to learn how other BP members find their financed properties. Thanks!

Bill S. · Answer

My owner financed deal came through a tired landlord (slumlord) whose old school ways of screening by his gut let a criminal in who never paid a dime. When the Landlord (slumlord) started eviction 5 months later the tenant called every agency in the City. Power company cut the power off at the pole to a 4 unit building. I paid him $20K more than the next offer he had and he carried me with nothing down (he owned it free and clear). I was able to get this deal because I owned the property next to his. I had to put $40K into to make it livable but it'll be paid off in 1.5 years and I'll be a sitting pretty.

My conclusion is tired landlords are the best. The key is to find those with paid for properties.

Bill Coleman · Answer

In looking here in Denver, I have come across a small handful of seller financed properties. However they wanted top dollar for the properties and healthy down payments to ink the deal.

I looked at a deal that had the potential for seller financing in Aurora right near DIA where three condos were listed for $330k. They were not worth nearly that much given the comps (worth more like $280k) but to get the seller financing, she needed a full-price offer and 30% down.

My advice is to find a good agent (good agent is defined as an agent who works tirelessly, is honest, is friendly, works with investors, owns his/her own rental properties and is a good fit for you in terms of work style and personality - life is too short to work with people you don't like). Once you have that agent, make sure you are evaluating deals and making yes/no decisions the moment they come in. You need to get in and see the property immediately and make an offer. You are going to look at a lot of deals but just keep going. One will appear when you least expect it (usually while on vacation;)

To do that, you need to have your team lined up or your agent has your team lined up. As far as what else is required for a seller financed deal, I am not sure as I have not done one, yet.

Bill Coleman · Answer

I also like the route of talking to neighbors. They know what's going on with their overgrown neighbor's property. For instance, the property I am in contract on, I found out the neighbor is going to list her house in the next year. I definitely want to speak with her before she lists the property to see if there is an opportunity for seller financing. This will happen long before she ever speaks with an agent or lists the property.

Keep pushing to find the soft spot. It's going to take a network of people working for you. However, I find that if you stop communicating with those people, they will forget about you and stop working for you.

It's also going to take some luck so you might want to be open to doing things in a way that is out of your routine. Go down streets that you never turn down and talk to people you normally would shy away from engaging. I watch my realtor in action and as soon as he sees a local, he grabs them and starts getting information (in a very friendly way). Invariably, we are able to use that information to our advantage.

Brian Gibbons · Answer

@Bill S. good points.

Landlords

FSBOs

Expired Listings and Current Listings (don't piss off the agent)

Wholesalers (no equity leads)

Listsource and MellissaData - Buy list of top of the market purchases.

Multi pronged and specific message to each group.

Troy Stoehr · Answer

I think what @Bill Coleman said is absolutely right.  Find a/some "seasoned" agent(s) who has a lot of connections in the RE investment world and they'll be able to help you out.  I'm up front with them and tell them that I'm working with multiple agents who are contacting me if they are finding deals and most of them are ok with that.  I also tell them that I'm especially interested in deals that aren't on the MLS... yet....

Also, some wholesalers (at least in my area) come across deals that will be seller financed, I've found a few deals this way.

Ultimately I think the best way is to start networking and entrenching yourself into your local RE investment "world."  I haven't set up a deal through this method yet but there are a few people that I now know who are looking to exit the landlord business in a few years who will potentially be wanting to sell their properties but still maintain some sort of cash flow.  I'd get to know these people on a personal level so that you are aware of what they are planning to do (REIA groups, landlord clubs, etc.).  Perhaps they will come to you first when they are ready to sell and I think it's easier to enter into a transaction with people who you already know and trust.

Jeremy Baker · Answer

You can try Craigslist and search "For Sale By Owner."  Most of those listing there are probably not going to take much less than market value so it may not be the best for what an investor is trying to achieve (at least, as @Bill Coleman mentioned, it's not ideal here in Denver).  That being said, I check CL a couple times a day because you never know.

Michael Campbell · Answer

The best way is to find motivated sellers that are more motivated to be rid of the burden of owning a property than they are to get cash. Tired landlords can be a good source since they have likely got most of the value out of the house already by renting if they've had it long. Free and clear absentee owned houses are a good source for prospects.

Account Closed · Answer

Seller finance might work if you have a good down payment. I see there is a lot of foreclosure in Connecticut.

My 2cents,

Joe Gore

Tim Cooper · Answer

Hi Winston,

Great question.  This can be very difficult to do.  In one book I read many years ago, (I can't remember the book) the author said even when the owner says no seller financing, if you write it up an offer w/ owner financing it will be accepted.

I have never done this, but when I used to sell Real Estate, I did sell one property that way for my buyer.  The owner said that it worked out great and he had never even thought about doing it that way.

I am looking forward to hearing what other BP members have to say.  I would like to buy something w/ owner financing.

Tim

Finding Seller/Owner Financed Properties???

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