All Forum Posts by: Scott Winter

I'm not totally following your reasons not to, so sorry if I'm misunderstanding your question.  Here are a few reasons sellers might offer seller financing when selling their property. It's definitely not for everyone, so don't feel like you're missing out on something.  

LOI - I'll offer you whatever value we agree your home is worth, I'll give you a down payment if you want, and I'll pay you 8% interest on the balance of the loan until it is paid off or sold in 30 years.  If you don't want to wait 30 years, we could amortize it over 30 years and have a balloon payment due in 10 in which case I'll refinance you out or sell the property.

Why are you selling the property?  Many sellers are tired of being landlords but wouldn't mind collecting a check every month still.  As a lender, you don't have to deal with the tenants and maintenance, just collect the payment.

What are you going to do with the money?  Sure you could invest it in something else, but many real estate investors know real estate really well and are most comfortable in that space.

What is your tax situation? Many people are at different stages of life and income may be high so selling outright may lead Uncle Sam to take a much larger portion of their income.

The beauty of seller finance is that you can structure it any way you want!  The first priority is to solve the seller's problem.  It sounds like he doesn't need the money right now, so what does he want, why is he willing to seller finance?  

One step at a time.  You can always have another conversation.  "So, I understand that you're looking to sell because... and you are trying to get... is there anything else you're looking for?  Let me crunch number on my side (or talk to my spouse/business partner/etc.) and see how I can make that work. When is a good time to give you a call back to discuss further?"

Then, understand your exit options based on the initial conversation. Depending on your desired investment return and path, you can then structure your deal.

I believe it is your own rule you are asking us about.  There is no rule of when or if you should show your credit.  So I'd say do what you need to build the credibility that you need to build with the seller...or in your case agent and seller. Agents tend to know the owner better, so at this point she is your best bet to getting the deal done. 

Pace is a jedi master. If you could show your bank account and all your successful businesses, and your TV show and all the other credibility that Pace has, you also might be able to skip the credit review with the seller.  Until then, you and I are working these deals however we can to get them done.  

Thanks @Chris Seveney. I'll shoot you a message.  

Thanks @David C.! I'll check his firm out.  Have you used his services?

Hi everyone, 

I'm looking for a referral to an attorney who can help me put together an agreement and record appropriate paperwork for a private money loan.  

Experience desired: Drafting loan documents, Florida usury laws, navigating foreclosures, utilizing deed in lieu of foreclosure, cross collateralization of properties, partial payment/partial release. 

Thanks,

Scott 

I don't consider appreciation in my underwriting calculations but I consider it when determining where, when, and how I'm investing. 

For what it is worth, I know most people in my real estate group target 10% entry fee--escrow/closing expenses, down payment, assignments/commissions, renovation.  Ideally also any minor renovation needed and holding cost until it is producing at fully capacity.   

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $70,000
Cash invested: $60,000
Sale price: $165,000

First flip! We made lots of mistakes, mis-judgements, and errors. Got caught with the interest rates starting to climb and couldn't sell easily. I was able to sell to one of friends in the Subto community with creative financing and walk away with $2k profit. We had some great lessons learned and are able to apply that to our next deals!

https://www.zillow.com/homedetails/2017-Goodnor-Rd-Cleveland-Heights-OH-44118/33661450_zpid/

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

Wanted to get into flipping.

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

Found it from a wholesaler working in the area

How did you finance this deal?

Hard Money Loan

How did you add value to the deal?

Completely renovated the interior and some of the plumbing and mechanicals.

What was the outcome?

I refinanced into a long term loan and sold subject to existing loan to a friend who lives in the area to use for Airbnb. $2k in pocket.

Lessons learned? Challenges?

The garage was in disrepair but we thought we could "fix" it rather than replace it. We spend a few thousand dollars on painting and roofing instead of $25k replacing it. Had we planned to replace the garage, we could have sold the property sooner and for more money to retail buyers on the open market.

Also, if you notice the spread between what we bought it for $70k and what we put into it $60k and the sale price $165k. How could we only make $2k... holding costs and lender fees.

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

Yes

Hey @Dorian Gray! I’m also buying in Cleveland!

Sounds like you’ve applied for a Chase loan. What else have you tried? 

There are so many loan product options within the different conventional, non conforming, and private money categories. There is something that will fit your situation if you keep digging. 

It seems easy to park money in a checking account for property reserves, but that feels inefficient.

Where do you keep your rental property reserves?