IS OWNER FINANCING THE WAY TO GO?

Question

Hi, I am just a college student with no money looking forward to take action and start my real estate investment journey. I have been watching multiple strategies and videos and I´ve seen that this Owner financing which is wholesaling looks like one of the best options for me, specially since I do not have a capital myself yet. Any comments or experiences about this? I would appreciate it!

Caleb Brown · Answer

Owner finance is great to start but I'd focus on earning money and building credit. Could be side hustles or a small business. While you do that attend meet ups, learn and try to find a mentor in the real estate world. Once you get some knowledge and experience look to owner finance. If you find a mentor often you'll be able to jump into REI with that.

Rachel Kokosenski · Answer

@Gabriel Sánchez - many realtors would love to have a college student intern with them in the summer. You could learn A LOT that way about how the market works, what makes a good deal, etc.

Steven Foster Wilson · Answer

Hey Gabriel, I agree with everyone's input on this. With wholesaling, you'd do well by putting a lot of effort in your cold calling to find properties that you could work with. I would also recommend that you try to attend your local REI networking groups and meetups, you could gain sources from these. Connect with as many real estate investors as you can.You can also consult with lenders, brokers and ask them for suggestions on who might be a good real estate mentor most will be able to provide one. Try to think of different ways you can add value to that person. What are your strengths? For example are you experienced in social media marketing? Could you offer a mentor some tips? This way its not just a one way street.

Gabriel Sánchez · Answer

Absolutely true, I have been meaning to look for a mentor as well. I will keep looking for one, thank you Caleb!

William Sing · Answer

Owner Financing is probably going to be your best bet but know that you will need to do work for it to find off-market deals. If you can find someone who needs some help and see how they do it, that would be ideal. That way you can learn a lot more and see what to avoid and not. I highly recommend going to a local real estate networking event as well!

Pablo Avila · Answer

In my opinion it's probably the best way to go, specially if you can do 0% interest. If you're interested, you could structure better deals when it comes to land. Since most people typically target single family, multi-family, land is a great opportunity to get started as well. Specifically Vacant Land. From experience, here's what I'd suggest you look for. You can easily pull these types of lists from your county appraisal district or 3rd party services. Property Types:Vacant LandAgriculturalCommercialBroken down into Specific Property Types:Mobile home lotAgricultural (NEC)Residential AcreageResidential LotMultifamily AcreageMultifamily LotAgricultural LandIndustrial AcreageIndustrial LotCommercial AcreageI'd look for properties that have been owned for at least 10+ years, and large acreage (this depends on you, I'd say more than 40+). I'd also look for places that are about an hour away from Major cities (for example in Texas: Brazoria, Galveston, Bexar, Fort Bend, etc.), there's plenty of land. Additionally, something that no one ever mentions is that many of these parcels have a 0 address, such as "0 Road", so many commercial real-estate software may not have these which is a competitive advantage that you'll have. I'd exclude:-Trustee-owned properties-Corporate-Owned Properties Here's the best part, you can work out a seller-finance deal with the owner, specifically to get a 0% interest. You can explain the tax hit they'll be taking if they get all the money up-front, and instead offer a payment plan in which they'll get what they want (or more), while at the same time allowing you to market the land and sell it to a developer or a buyer that may be interested in your area. This is taking seller finance to another level in which you get a 0% loan while at the same time sell the land for a high market value!.

Miranda Micire · Answer

I would also suggest in addition to the great feedback you've been given is to find a local meet up and then ask an investor that you meet there if you can help them/ shadow them/ provide value of some sort to them so that you can learn from them also.

Eliott Elias · Answer

The second best way to buy property, first is subto.

Dan H. · Answer

Most sellers offering owner finance still desire a down payment. Foreclosing is a hassle and has expense. The seller will want to know that if they have to foreclose that there is some equity to compensate for the hassle. It would be a rare find to find a seller willing to finance that does not require a significant down payment.Traditionally, the RE acquisition that requires the least amount of cash is a high LTV FHA loan (96.5% LTV). Good luck

Gabriel Sánchez · Answer

Hey Steven, I completely agree with you, I will keep gathering knowledge and skills to add for all these type of partnerships. And will be attending my first REI meetup in a couple of weeks! Looking forward to network and learn more. Thanks for your advices brother!