All Forum Posts by: Matt Nico

Hey guys! My name is Ben Morand and I am a 20 year old college student interested in buy & hold investing. Right now, I am just trying to gain as much knowledge as I can and build connections, as I am so eager to get started in the real estate investing world.

So currently, I am trying to learn the various ways to creatively finance my first deal. I am looking to do this because as a college student, I lack steady income and cash on hand, so it doesn't seem very likely that I'd be eligible to qualify for a conventional loan. While I've looked into hard money and FHA 203k loans, another option that I've considered is seller financing.

I’ve read Brandon Turner’s Book on Investing With No (and Low) Money Down, so I have a general understanding of several creative financing solutions. However, I still have several questions about seller financing, so if anyone would be willing to give some insight, I’d greatly appreciate it!

1) How common is it to find a seller that is willing to do seller financing? I know this is a bit of an ambiguous question, but I basically am wondering if it happens often (because from what I know about it, it seems like an amazing opportunity for both the buyer and the seller).

2) Is it hard to obtain without steady income? For my situation in particular, I do not have the steady income required to take on a conventional loan, so being able to work with seller financing instead would be ideal. I also am wondering because as far as I know, the seller’s property is used as collateral so if the buyer is unable to fulfill the loan, the seller gets the property back anyways. Is this generally how it works?

3) Going off of my last question, because the property is used as collateral and the seller gets it back if the buyer is unable to fulfill their side of the loan, is it common to see 0% down? Or do sellers usually still require a down payment? (sorry if this sounds a bit simple, I am just trying to understand the potential scenarios that can come out of such a deal)

4) What are interest rates typically like for seller financing? I'm assuming they are higher than a 30 year fixed rate, but how do they generally compare? Also, are the terms usually long spread (20-30 years) or shorter spread (1-5 years)?

5) Where do people usually search for properties that would be more open to seller financing? I know for this to work well, the seller needs to have a hefty amount of equity in the property, but most property owners do not, so I am just wondering if there is a way to know this before contacting the owner (or owner's agent)?

Thank you in advance to anyone willing to give insight! I really really appreciate it. As a new and aspiring investor, I am so eager to put myself out there and take action towards my first deal.

I am open to any and all comments and would love to connect with others for the future if you’d like!

Thanks everyone!

Hi everyone! I'm new to this community and this is my first post here :)

I have a question I was hoping you guys could help me with.

I have built up quite a bit of equity over the years paying down and renting out my prior residence. This was my first house and the neighborhood I bought in has really taken off. It's been cash flowing between $500 -$600 per month over the mortgage since my fiance and I moved out in November 2018. I thought about selling it and using the cash for something else but but I'd rather do a cash-out refinance and keep the property because I put a lot of money into re-doing the HVAC, painting, bathrooms, landscaping etc. I'd like to capitalize on those investments for a little while longer. My goal is to use the cash as a downpayment for more single or multi-family homes and increase my revenue stream. I reached out to my lender about doing a cash out (Wells) and they said they are not doing any cash-out refinances right now because of the market.  I also asked B of A and they said they can't lower the rate and it wouldn't make any sense to re-fi. So is my only option to move it over to a commercial loan and have to re-finance every 5 years, plus pay the higher interest rate?  (Side note; i have another separate rental property that i have a commercial loan with and it's a 5yr fixed/25yr amortization with a 4.95% rate.)

Here's all the information on the house and loan.

Current Loan with Wells Fargo principal balance: $139,672

Conventional 30yr loan that started in Feb 2012

Property estimate value $312,000

Interest rate 4.125%

Monthly mortgage: $1,160 (includes principal, interest, taxes and insurance)

Monthly rent: $1,700 (Tenants are in a 1yr lease that expires February 2021)

Would love any advice and to hear what you guys think! Thanks! 
-Ben

Hey guys! My name is Ben Morand. I am a 20 year old college student and I am kind of a noobie to the world of real estate. I have read several books such as Brandon Turner’s Book on Rental Property Investing, Investing With No (and Low) Money Down, and Managing Rental Properties, as well as a few others outside of Bigger Pockets publishing. Right now I am also reading J Scott’s Book on Flipping Houses, and plan to follow it up with his Book on Estimating Rehab Costs.

My ultimate goal is to become an avid buy and hold investor, focusing on small, 2-4 unit multi family properties that I can start out managing myself.

However, right now I would love to dive into the world of rehabbing properties, as I feel this is a great way to master the art of finding deals, building connections, learning the renovation process, and building capital to ultimately reinvest into rentals.

I am focused just outside the Orlando area, in a neighborhood at the corners of Apopka, Altamonte Springs, and Longwood. I’d love to meet some other new and experienced house flippers in the area so if anyone would be able to refer me to some solid meetups, I’d greatly appreciate it.

Thanks in advance and I’m excited to get to know some other investors in the area!

@Matt Nico I invest and live in MI -- metro Detroit area. I don't know that there's a "hard way" or "easy way" in real estate -- I think there are different ways that work for different people. I have been very fortunate in my law practice, so 20% conventional works for me. It's easier for me to find a house that needs light rehab and get it for a little bit under market on a conventional loan than to do BRRR. I don't have to do creative financing, I don't have to give up ownership via partnerships, and my rates from the banks are second to none-- so seller financing doesn't really interest me. I recognize there are methods that don't eat up as much cash, but this way works for me because it's more compatible with my lifestyle and goals. If that makes any sense?

@Matt Nico

I use a pet screening process.

Our prices range from 30-50 monthly or 300-500 yearly depending on the pet score. This is pet rent and non refundable. People will pay it. I don’t personally agree with it. But it’s my job to enforce.

@Matt Nico no problem! I hope it works out.

I have a W2 job. I have a primary residence that I house hacked until this past January, and 3 SFRs. All my loans are 20% down conventional. I was looking into portfolio lenders because I was told (erroneously) a person could only carry four conventional mortgages at once. At that time, I was about to be at four. So that's what prompted me to start looking into portfolio lenders. However, I spoke with my mortgage broker and he said he could get me 10 mortgages. So I ended up just doing conventional. The interest rates and costs are lower. 

You are right; I will eventually hit a wall. At that point I'll switch over to a portfolio lender who lends based on DSCR. Or at least that's the plan :)