All Forum Posts by: Cody Richard

@Jason Priegnitz Great question. There are many different ways you can go through this process. Typically, you can leave the underlying mortgage in place and make sure the seller financing payments can cover their mortgage. Some types of seller financing violate the due on sale clause and some do not. Honestly, violating the due on sale clause is not a big deal in itself. If you have additional questions feel free to reach out to me directly.

Also, I recommend checking out The Creative Financing Podcast. It's built around seller financing and it's what I used to learn how to run my wholesaling business. Start at episode 1 since it provides a great overview of the different types of seller financing. You'll have to go to their website for the first few episodes since those episodes are no longer on the podcast apps.

@Viron Hale Nope! This is outside of Bigger Pockets. Bigger Pockets is an amazing resource for learning about real estate, but there are also many other podcasts and resources out there!

@Kyler Cook Like some comments above suggested, I would look into creative/seller financing. Depending on where you're looking to buy, $20k should be plenty to put as a down payment towards a creative financing deal. To learn more about it, I recommend checking out the Creative Financing Podcast. This is what I used to learn about it and it's how I run my wholesaling business. I recommend starting at the beginning to understand the basics and then go from there. To listen to the first few episodes, you'll have to go to the podcast's website. Feel free to PM me with any questions!

@Viron Hale I completely agree with @Rick Pozos about creative financing. Those are the types of deal I use to run my wholesaling business and no bank financing is involved. Check out "The Creative Financing Podcast" to learn all about these types of deals. I suggest starting at episode 1, which you can find at the podcast's website.

@Justin Franklin There are many ways to get creative through seller financing. That's currently how I operate my wholesale business, but you could just as easily use it for buy-and-hold investing. I recommend listing to The Creative Financing Podcast. That's where I learned about seller financing. It walks through deal structuring, types of seller financing, and much more. Taking that approach will allow you to find some additional deals without conventional financing.

If you have any other questions, I'd be happy to help. 

@Paris Johns I agree with @Michael Ohara. You won't know if a seller is open to owner financing until you ask. Also, it is possible to get much better terms than the 10/10/10 rule. I'm typically between 3-4% interest, 3-6 year term, and 3-8% down. The most important thing will be to practice and understand terms so that when the opportunity presents itself, you are ready to execute. I recommend listening to The Creative Financing Podcast. That is where I learned everything I know about terms.

There are so many different ways to structure owner financing. You just have to find what works best for you and your business.

@Aaron Ferguson It is definitely possible to use creative financing on a property over $1M. If you are able to get the owner some cash flow they are more likely to accept as well. I recommend listening to The Creative Financing Podcast. That's where I learned everything I know about financing.

The offer you make will depend heavily on the situation. Does the seller need a lot of money up front? How much cash flow do they currently make? Is there enough income from the property to give the seller some cash flow and to give you some cash flow? What is the most important thing for the seller (i.e. price, interest rate, down payment, term)? If the seller does not need all of their money upon sale, doing creative financing could be a great way to help them make more money on their equity. 

It's definitely possible that the seller would take $80k down. Depending on the purchase price, that would be around 5% down on the property, which isn't uncommon in creative financing. You won't know unless you try ... "Hey Mr. Seller, I typically purchase properties around 5% down, okay?" If they want more, they'll definitely speak up. If he wants a larger down payment, it may be worth finding a partner.

@Jason Fraser I can't speak for the majority, but I wholesale my properties through assigning contracts. Deals that I receive through other wholesalers are typically done through assigning contracts as well.

Thanks for sharing this Alan! Super interesting to see it graphed out.

@Austen Sweeten - I agree with Mark. I believe you should sell and take the $85k profit. With that, you could buy a primary residence with 20% down (like you said). Or you could use the $85k profit to purchase a primary residence with an FHA loan (3.5% down) or a Mountain America 10% down conventional loan. With the current economy, I'm not sure that Mountain America is currently doing the 10% down conventional loan, but it's at least worth researching.

If you bought your 363k property at 10% down, you would have just under $50k left to spare. With that, you could put a down payment on a rental property from a wholesaler/investor. Or you could get a conventional loan for a property that costs around $250k. Hope this helps!