How to Make an Owner Financing Offer to a Burned Out Landlord Part 1

How to Make an Owner Financing Offer to a Burned Out Landlord Part 1

This has to be one of my favorite techniques for buying property with no money in the deal.

Finding burned out landlords is the hard part, and it is not all that hard. You can find them in a number of ways.

You can call the “for rent” ads and simply ask if they would rather sell the property.

You can track evictions and domestic disturbances in your area. Anywhere you find a landlord who has evicted a tenant, you might have a burned out landlord.

Police or code enforcement actions on at a property are also good indicators that your landlord might be ready to sell. Heck he might be desperate to be rid of his tenants.

In all of these cases, you need to open up by asking if they want to sell the property since your goal is to buy a new property this month.

If you get a no, just ask them to keep your number in case something changes.

If you get a yes, then you are in the game.

A Yes leads to a few more questions.

You want to ask about the condition of the property, any repairs that are needed. People will generally describe their property in the most glowing terms. This leads to the next question.

“That house sounds great, why do you want to sell it?” This is a gotcha question. The only legitimate answer is to describe their problem. You will generally hear something like,

“I hate tenants” or “I just want to get out of the rental business”.

If you get a non-answer to this last question then you need to probe a bit farther. Something like “what do you dislike about being a landlord?” You need them to articulate a problem that you can solve.

Then it is time to turn the conversation around. Ask “tell me what you like about being a landlord” Sometimes people will say that they like meeting new tenants but most of the time the answer is the money.

This leads you into the pre close.

What if I were to give you the monthly check that you love without the tenants that you hate, would we have a deal?

That one question opens up the negotiations. From that point on, you just need to hammer out the monthly payment (which is really important) and the overall price (which is mostly irrelevant because the tenant will be paying for it).

Making the offer is pretty darn easy.

If the property needs work, and this happens sometimes, then I need 90 days before the first payment it due to get the property up and rented.