All Forum Posts by: Michael Chilton

@Edward Cates How long is the term? I'd probably settle for lower ROI if I lived in a market like California with high appreciation.

@Matt M. That’s a great strategy, but I would argue it’s not zero down. You converted your equity to cash to purchase the second property.

@Dennis M.

You get zero percent interest seller financing? How long are the terms?

@David Flores

I’m with you. Not many people are going to take that deal. You’d need to write a lot of offers before you got one under contract. BUT, the payoff could be worth the effort.

I like your strategy too. You ended up with 11% equity. I don’t think I’d do a seller financed dp if I couldn’t come out with at least that much equity.

I heard an interesting strategy discussed on episode 1932 of Joe Fairless’s podcast with guest Joe McCabe. The guest uses 100% seller financing at a purchase price that’s 75% of market value. After 3 months he refinances with a traditional loan and has 25% equity. Sounds like a great strategy if you can get it, but seems like it would be very difficult to find a seller willing to go along.

A similar, but perhaps more palatable solution, would be to make an offer at 75% of market value and ask for the seller to finance the down payment required by the lender.

Has anyone executed either of these strategies? I’d be interested to learn how to best propose them to a seller.

@Scott V.

Do it. Don’t put any more than tax, title, and license plus $2k down. 3% is cheap money. Keep the cash to put toward your first deal. Don’t put it into something that’s going to depreciate.

@Danielle Clark

I inherited a section 8 tenant with my first property. It’s a c- property and can be hard to find good tenants, but I love the ach payment from the city every month. She’s been there 10 years. Far from a perfect tenant, but worth it to me.

@Jay Graham I see. Are they buying a business, or just the land?

You might be interested in this conference: https://peoplescompany.com/land-investment-expo.

@Jay Graham

Consider the following situation. You buy 100 acres of crop land in the Midwest for $5k/acre (extremely conservative). If you put 20% down at 4% over 30 years the payment would be $28k/year. You cash rent for $250/acre, for annual income of $25k. This results in a net loss of $3k/year. If you pay cash, you have a 5% ROI. Who knows what's going to happen to land prices. How can they continue to rise when commodity prices are falling?

@Jay Graham

Are you planning to operate, cash rent, or custom farm? You need cash to make this work in today’s market.