Spoke with my first Home Owner today! Advice?

Question

As I was driving home from work today I saw a for sale by owner sign literally 6 minutes from my house.    Im located in Massachusetts on the South Shore to be more specific. As a new RE investor still gaining knowledge and looking to do my first deal, one of the things I learned about was seller financing. This is really what I'm interested in and how I see myself entering the business. So I pulled over to take a picture of the sign and the owner came out. We talked for a bit but I wasn't too sure what questions to ask. This was the first home owner I had ever talked to that was selling his property.

I did manage to ask the basics such as: Why are you selling, and for how much? To give you some background info on the property, its a single family. He's selling for 301k, and he's selling his house because he and his wife wanted something bigger. He plans on having another open house soon and I would like to attend it.

To be more prepared for either my next encounter with him, or another home owner, what questions should I ask? Also, what steps can I take to be more prepared for successfully completing a seller financed deal? Also what documents should I look into in order to expedite the process? I also need to build my team up and would definitely need an attorney and title company so I seem more serious and professional when speaking with a home owner. Any advice on where and how to find the best people for my team? Thank you all in advance for taking the time out to read, and help me.

Best Regards,

Marquis

Tom V. · Answer

Hey there @Marquis Harris,

That's cool that the owner came out and you got a chance to talk to him. As far as what other questions to ask, there is a document in the BP file place that can help you.

It is actually a phone script for talking to sellers, but the same thing applies for face to face. It was uploaded by @Brandon Turner.

https://www.biggerpockets.com/files/user/brandonat...

Hope that helps. Good luck to you!

Marquis Harris · Answer

@Tom V. Thanks for that document. Its definitely a good guideline for what to say to a seller.

@Percy N. It never occurred to me to ask those questions. Next time I see him I will definitely ask. And I would like to purchase rental properties, so I would try and find tenants to put in there.

@Kyle Cabral Great advice! I will do more studying on seller financing so I sound intelligent when speaking about it. And congrats on that deal! I have some questions about it if you don't mind me asking. I'll probably send you a pm.

Account Closed I assumed that since he owns it that there isn't a mortgage on the property. But I will look into that!

And thank you all for the Comments/Advice!

Account Closed · Answer

You need to find out if there is a mortgage on the property.  That is important to know.  If there is a mortgage, find out the balance.  You can't make an intelligent offer without knowing this info.

Kyle Cabral · Answer

@Andrew Beaver haha, come on down to New Bedford and Fall River. Especially Fall River, throw a rock anywhere close your eyes and you'll be sure to hit one.

But yes, specifically this deal is in Fall River. PP was $230,000.00 we got $65,000 on a secondary note to the bank, had to come up with 4k plus closing costs. They were under market rents which allowed me to negotiate a bit stronger. Now i'm hunting for more with some partners.

I see your in Malden, I own a condo in the area. I just see an opportunity down south shore in the distant future as I'm not sure prices can sustain up there and are going to be forced down south. You're already seeing this with Amazon and I'm sure we are going to see it more. Especially if some sore of connection (T) gets down here.

Best of luck!

Kyle Cabral · Answer

@Marquis Harris I'm from the south shore as well (Dartmouth/NB area to be exact). Best piece of advice I can give here is don't over think it and be straight up with him. A simple question like "Would you be willing to finance all or some of the deal if I were to make an offer?". And see what his response is.

I'm big on reduced waste -- I wouldn't go crazy on researching the property, comps, etc, if you're only play is seller financing. If he answers yes or some sort of variation of it, then move to the next step and see what number makes sense for you.

Before that question though, I think there is value in just understanding the basics of seller financing 101. You want to come across as intelligent and having their best interest. Throw some basic numbers out in terms of why it's beneficial to seller finance (added interest, better to their bottom line)

I just bought a 5 family and only brought 8k to the table as the seller financed 65k. Those opportunities are everywhere, just got to ask the right questions.

Kyle

Spoke with my first Home Owner today! Advice?

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