All Forum Posts by: Alejandro Ferro

Hi, I've done some deals in Philly and that transfer tax is no joke. It can definitely add up. When it comes to covering the cost the seller is going to have that cost in whichever type of transaction. On the market or off it is a cost that has to be considered. I just take that cost into consideration when it comes to the offer. I make it clear to the sellers that we would pay it and cover the cost but that going to be reflected in my offer amount. The same goes for the buyers the cost is taken into consideration. 

Don't think too detail about that one as it has to be paid no matter what. It is just as another cost to be taken into consideration in the analysis. 

As an agent I see quite often this opportunity missed being presented to clients and sellers.  I am not sure why it is not more common in the residential field when there are a lot of opportunities being missed simply by not mentioning the seller financing option. If you are an agent is this something you bring up to your clients? 

There are a number of benefits for homeowners who sell their homes via seller financing. Not only can they avoid paying capital gain taxes in a lump sum, but they can also make a return on their investment. In addition, the buyer can get into a home without having to go through a bank. This article will explore all the benefits of seller financing and why it is becoming an increasingly popular option for both homeowners and buyers.

As a homeowner, one of the biggest benefits of seller financing is that you can avoid paying capital gain taxes all at once. If you sell your home for more than you paid for it, you might owe capital gain taxes on the difference. However, if you finance the purchase for the buyer, you can avoid this immediate tax implication. In addition, you can make interest on the equity and have a bigger return than taking a lump sum payment at settlement. By going through the homeowner instead of a bank, buyers can avoid a lot of the hassle and red tape that can come with getting a mortgage such as appraisals and inspections. Although still recommended to get it is not a requirement.

This has made seller financing an attractive option for buyers as well. By providing the financing yourself, you are able to work with the buyer on the price and terms of the loan. This can help you sell your home faster and for a higher price than if you were to go through a bank.

In the current market, with the current interest rates, the banks are standing to make the most money, not the consumer. Seller financing shifts that balance as the seller can make that interest and charge a more attractive rate than traditional banks. In a traditional home purchase, the buyer has to go through a bank to get a loan. This can be a lengthy and complicated process, especially if the buyer doesn’t have perfect credit. With seller financing, the buyer can bypass the bank entirely. The seller will make more money than they would in a traditional savings account, the money is secured by real estate, and the buyer is getting more attractive terms than going to a bank.

Seller financing is a great option for both homeowners.

Another big benefit is that you act as the bank. This means that if the buyer doesn’t make their payments, you can foreclose on the home and keep any payments that have been made until that point. Your funds are secured.

There are a number of benefits for both homeowners and buyers when it comes to seller financing. If you’re considering this option, be sure to consult with a financial advisor to see if it’s the right choice for you.

Thoughts? 

Hi Robert, 

I use DealMachine on a daily basis when I'm driving around. I feel as if it has the best features and options to take pictures of the front of the house. You get all the homeowner data and it's easy to export to a CSV file. Prior to DealMachine, I used Propstreams d4d feature in their app but DealMachine is far superior. It is easier to read the addresses versus having to click on every plot to figure out what number each is. I'm all over Cook County and Dupage area, so I travel quite a good amount. I'd say if you're considering it it's worth it if you use it and execute on reaching out to homeowners. I personally use their basic plan as I don't need all the extra features such as pictures but it is nice to have. With Google street view I personally didn't feel the need to spend extra money on that feature. Once I get a hold of a homeowner and they are interested I will worry about getting an updated picture. 

Thank you @Marcus  I will reach out to them

Investment Info:

Single-family residence fix & flip investment in East Norriton.

Purchase price: $252,500
Cash invested: $30,000
Sale price: $350,000

This property was a house hack. A SFR with an in-law suite. The house was original 70s cosmetics when I purchased it with the in-law suite added in the early 90s. I rented out the in-law suite to a friend during my whole ownership which paid 75 percent of my mortgage. Updated all the bathrooms and flooring, Relocated and sold the property (should have kept renting it).

What made you interested in investing in this type of deal?

I was tired of renting an apartment and this deal came across my lap. Could not say no to having a pool, a sunroom which I put a hottub in, an in-law suite to help out with the mortgage. As a single 28-year-old, I could not have gone wrong.

How did you find this deal and how did you negotiate it?

It was on the MLS. I negotiated it through my realtor. They already had it good priced was able to negotiate $6500 toward closing cost as a concession.

How did you finance this deal?

Conventional 20% down as I had a good w2.

How did you add value to the deal?

I remodeled the master bathroom by expanding it adding a double sink and a large shower. Also built a custom walk-in closet to it. Updated the deck as it was old and rooted. Remodeled the other two bathrooms.

What was the outcome?

Net about 50K after closing cost and commissions. not including the mortgage for four years was paid 75% by my tenant, in the in-law suite.

Lessons learned? Challenges?

Should have never sold it and done a BRRRR. Continue to grow a portfolio.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jeff Faultebaurer with Keller Williams in Montgomery county, Pa has been my go-to guy for my flips and purchases since this transaction.

Hey everyone! I am freshly into the wholesaling game and I am looking to hire some VAs to assist me. I need help with cold calling and going thru 11k leads I have. I have tried searching the forums and searching Facebook groups and such but it is hard to distinguish scammers from real services. Can anyone recommend one here that you have past experience with? 

From my experience with HML anyone that charges an upfront processing fee or origination fee is most likely a scam. The appraisal fee is a different story as that goes to a third party. However, find another lender if they are asking for money up front to be safe.