The Owner Financing Real Estate Strategy | 626

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Today, we are giving you the 3 key points of the owner financing real estate strategy. If you get them right, you’ll find better opportunities, make more money, and more importantly, they’ll give you a tremendous edge over your competition. Stay tuned to learn how this strategy functions, what its 3 forms look like, and where to find the deals that you can obtain employing the owner financing.

What You Will Learn About The Owner Financing Real Estate Strategy:

  • What the owner financing real estate strategy is
  • Its basic form
  • What the multi-mortgage carryback is
  • What the contract for deed is and how it differs from other owner financing forms
  • How the three-option letter can help you obtain the deals
  • Where to find the letter and get other educational tools for free
  • How to find deals through realtors and classified ads

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Transcript:

Speaker 1: From coast to coast, Epic investors are doing the most. It’s time for another Epic field report.

Matt Theriault: On the phone, I’m joined by REIA’s client Abbas. Glad to have you, buddy. I noticed in Follow Through Crew Friday, let’s see, that was two weeks ago now, first deal closed for $8,000 assignment. Two others under contract, thanks to Matt [inaudible 00:00:21], for all your help, and shout out to Parker as well. So, perfect, you got the first one closed. You were at The REIA Summit four, five months ago, I guess, right?

Abbas: October.

Matt: Okay, and it a little bit for us to get here, so we’ll talk about that, but let’s talk about this specific deal. $8,000 assignment. How did you find these deal?

Abbas: This came from a PPC lead. [inaudible 00:00:41] helped me with the PPC set up.

Matt: So, we’re managing your PPC for you, or did you do that yourself?

Abbas: You’re managing it for me.

Matt: We’re managing it. Okay. Got it.

Abbas: And, man, we turned it on, and I got a lead almost immediately. It was a tired landlord. He had owned it for something like 12 years and had recently been vacated, needed work, and he was just tired of dealing with it. Didn’t want to fix it up. Got the call, went and met him the next day, and got him under contract the following day. He said he needed to get the okay from his wife. There was some back and forth. But we got him under contract.

Matt: And so your [inaudible 00:01:19] strategy was an assignment so that we were wholesaling the property.

Abbas: Correct.

Matt: My next question is, how much money did you make? So, you put that in here, so you made eight grand, so good. How did we celebrate on this one?

Abbas: How did we celebrate? So I got to tell you, paid down some debt to be fairly honest. Took the wife out to a little dinner. I have two little girls. So we had a little family dinner, celebrated that way and honestly, nothing big.

Matt: Yeah, it’s not enough to retire on is what you’re saying.

Abbas: Exactly.

Matt: Okay, good. All right, so that was then, so that was what, two weeks ago, and then just last week, I saw something posted here.

Abbas: That happened this week, so we haven’t posted it yet.

Matt: Oh, Parker posted that he had it under contract and then you guys have closed it since then.

Abbas: Yes, sir.

Matt: Got it. I wanted to read that one real quick. Eight contracts currently pending, one deal was a referral from Abbas, from the Epic community, and we stand to make about 40 grand on that. And so that’s the one that you actually did close this week.

Abbas: Yes, sir. Let me elaborate on that.

Matt: Please.

Abbas: I was leaving for a vacation to Disney World. The day before we were leaving, I got a good lead-in that I could tell had some potential. I didn’t have the time to really lock it up. And Parker is in my market here in Atlanta. I have become pretty good friends. So I reached out to Parker, I said, “Hey, Parker, man, while I’m away, can you handle some of these leads for me?” So this one I got from a Craigslist ad, which I kept telling you wasn’t working. I got it from a Craigslist ad. Kid inherited the home. It’s a little outside of metro Atlanta, but it was surrounded by commercial property. That’s where the money was. It was a residential property surrounded by commercial, so we saw some potential there. Locked it up pretty cheap, found a commercial buyer. It was a team effort because there were a lot of issues with the seller. He was a little difficult to deal with. So, Parker and I really tag teamed on that. And $39K spread. We just closed it this week.

Matt: Congrats dude. So, you made $39,000 from a free Craigslist ad, is what you’re telling me.

Abbas: That’s what I’m telling you.

Matt: And just, what, a month before that you’re like, “These Craigslist ads aren’t working.”

Abbas: We got that one from beginning to the closing table in three weeks, and would have probably been two weeks if the guy wasn’t so difficult to deal with.

Matt: Good. Okay. And then, just before we started recording, you’d said you had a few more things coming up. Some other opportunities you’re working on.

Abbas: Yeah, so, I-

Matt: Let’s just pause there for a second. I want to go back, because, in the last two weeks, we’ve got two deals closed. You’ve got some other opportunities that you’re looking at right this very moment. So obviously something has happened because we went four or five months with some frustration. Walk me through that process, and now, in hindsight, how do you see that experience?

Abbas: It takes a little while for the marketing to kick in. You know, the seed you plant today? They bloom later on, right? If you will. So there’s a lot of that. And it varies, right? Some people get lucky, get a deal right away. It took me a little longer. But, I think you know this from the questions I’ve been asking, I stayed with it. And I really worked hard. Any downtime I’ve had, I’ve been trying my best to devote to this and my learning. And-

Matt: I really acknowledge you for that, that you stuck with it. And it’s because it’s the consistency that is going to snowball and produce results. And you’re starting to benefit from that right now. You’re starting to see it all happen. And you know, I was at The REIA Summit, we did a fulfillment summit two weeks ago, the subject of Tony [inaudible 00:04:35] came up. And I’ve been working with him for almost a year. And not a whole lot happened for him for a whole year. And all of a sudden, month 13, 14, 15, he’s got 39 properties in his rental portfolio. I don’t have enough Tony [inaudible 00:04:52] stories because people quit too soon. That’s why I’m coming around the long way just to acknowledge you for not quitting and just sticking with it and trusting the process.

Abbas: Thank you for your help during that process, I really-

Matt: Absolutely. That’s what we’re here for. I always say that I’ll match the commitment that you give, you’ve got it all from me. You’re just one of those stories. You’re the Tony [inaudible 00:05:12], right? It didn’t take you a whole year, took you, what, four or five months, but it is the same conversations that we’re having. You sent me a [inaudible 00:05:18], so I just wanted to see if you could speak on this. You said, “I made 35K this month. By the way, my day job as an IT consultant, two wholesale deals. My first IT job out of college in 2005 paid $41,000 per year. It took me five years to get my degree, I trained with you five months ago.” What was going through your head when you were typing this? What were you thinking?

Abbas: Honestly, I wish I had started this sooner. I’m 36 now. It takes you a little while to see the light, per se, some people see it later than others. Some people never see it. Right? I did what the world told me to do. I went to college, I got good grades, got a corporate job, worked my way up, got into independent consulting and that’s been fruitful for me. I’m not gonna lie. But I knew there was more out there in different ways. I started my real estate journey on my own. Buying [inaudible 00:06:08] rentals. Right? And that was just three years ago. But I learned pretty quickly that that’s not the way to do it, as I researched and read, etc, etc. I stumbled upon you because my cousin did Facebook ads for you at one point, so he [inaudible 00:06:23] me to you. Through you, I met Parker. So over the last three years, I saw Parker’s success. And that’s really what motivated me to look into The REI Ace program. It’s been a progression, right? I know there’s more out there. How do I get there? You make mistakes. I bought those retail properties. It’s been a progression. So I’m getting there.

Matt: Yes, you are. Thanks for sharing that. I appreciate it. Because I think there are people that are listening can really resonate with that story. Right? We do what we’re supposed to do. We end up midlife somewhere between 35, 45 years old and you’ve got on the surface, what appears on paper to be quote-unquote successful. Everything’s worked out okay. But then you have that void in there, that you’re feeling like, “Hey there’s, there’s something more out there, not getting any younger. And let’s go in and take a shot.” So congrats, you’re exactly the type of person I love to work with. I love to help people that are out there to help themselves. And so it’s been a joy. It’s been a pleasure.

Abbas: Thank you.

Matt: You bet. Keep doing what you’re doing. We’ll do this all over again. Sound good?

Abbas: Awesome. Awesome. Thank you so much.

Matt: Okay Abbas, take care buddy.

Abbas: Good talking to you. Bye, bye.

Matt: Bye, bye.

Speaker 1: This is Theriault Media.

Matt: I just bought my first property with a bank loan. The rest of my portfolio has been acquired with a strategy called owner financing real estate. And a good chunk of those was even sold with owner financing. Today I’m going to show you how I did it, because, I showed Josh, I showed Nathan, I showed Corey, I showed them all how to do it. And I’m going to show you right now how to do it too.

Okay, I’m gonna give you three key points when you’re considering the owner financing real estate strategy, because if you don’t understand how to do this, your options will be very limited when you’re making offers, and you’re going to miss out on an opportunity. But if you get it right, you’ll not only make more money with the opportunities that you already have, you’ll have a tremendous edge over your competition. So this guy right here, a client of mine, Josh Miller, he closed 85 transactions last year, and half of them were a result of what I’m going to share with you right now.

So let’s go over those three key points. Point number one, owner financing real estate, what is it? Very simply, owner financing is a financing arrangement in which the seller agrees to accept installment payments directly from the buyer rather than having the buyer obtain a loan from a bank. Basically, instead of getting a loan to purchase a property, the seller themselves, they step into the bank’s role, and instead of making payments to a bank, you make those payments directly to the seller. With this owner financing real estate strategy, the seller is the bank. So now, you know what it is. But there are different structures for our purposes here, and that brings us to point number two, the three different types of owner financing structures.

One, the free and clear carryback. Now, the seller owns the property outright in this scenario. Meaning there’s no existing mortgage on the property. They own it outright. And the seller sells their property to you by accepting installment payments directly from you. Very straightforward, very clean transaction. This is seller financing in its most basic form.

Now, number two, the multi-mortgage carryback. Most commonly in this scenario, the seller is going to own the property, but there’s still an unpaid mortgage on the property. And using the multi-mortgage carry back, this is a way of purchasing real estate where you, the real estate investor, would take title to the property, but the existing loan stays in the name of the seller. It stays in place and in the name of the seller, but you own the property. In other words, you are purchasing the property subject to the existing financing. Then the seller will give you a second mortgage in the form of what’s called secondary financing. In this instance, you would control the property because you’re on the title, you own it, you’d make payments to the first mortgage. The mortgage that’s still in the seller’s name, the bank. And then you make payments to the second mortgage, of which would be directly to the seller. So the multi-mortgage carryback is exactly what it sounds like. There are multiple mortgages in place. There is more than one mortgage on the property.

Number three, contract for deed. Now, this is still owner financing, but it differs from the previous two as the terms of the installment payments is written into a contract. So technically, this is a business transaction as opposed to a real estate transaction. Thus, the seller stays on the title until the buyer fulfills the terms of the agreement. The buyer still will have the full rights of ownership, and they’ll have full use of the property per the contract, but wouldn’t officially appear on the title until the final payment was made. So if all this is making sense to you so far, do me a favor, type the word Epic down below in the comments section. Do that for me. That’s just really good feedback for me that I know you are getting what you came here for.

All righty, so point number three, where do you find deals like these? Well, it’s really pretty simple. In short, you can find them in the exact same places you’re finding your other deals already. You just have to present owner financing to the seller instead of the traditional all-cash offer that most people do. But, I’m going to show you how I found most of mine. The first way was through direct marketing to landlords. And what I’d do is I’d send them a cover letter introducing myself, accompanied by what’s called a three-option letter of intent. Now, this letter of intent would present three different types of seller-financed options of how I was prepared to purchase their property. I put my phone number at the bottom, and those that were interested would call me and they just tell me which option that they liked best. If you’d like a copy of this letter for your own use, you can now get free access to The Epic Pro Academy at epicproacademy.com. That document, it’s inside, as well as video lessons on this subject and more. All of my other contracts and paperwork can be found there too.

All righty, so the second way was through realtors. My favorite question to ask a realtor every time that I met one was, “Do you know of any listings that would be willing to carry back financing?” And every once in a while I got a yes, but mostly I got no’s. That was okay though, because what I would do then is, I’d take their business card, realtors love to hand out their business cards, I’d take their business card, I’d drop it into my CRM, and then I’d assign a realtor specific auto-responder that would stay in touch with the realtor on my behalf, constantly reminding them at least once a week of what I was looking for. And then when one of these seller finance properties popped up on their radar, the realtor would then call me. And the third way was through online classified ads, and I still do this actually. I set up a custom search for owner financing, seller financing, and seller carry back, and I do that in the real estate sections of the classifieds. And then anytime a new property was posted that had any of these words in the title or description, and the Custom Search would send me an email, and I’d then call the seller, and present my owner financing offer.

If you want to get more owner financed ideas and other creative strategies like this, get free access to my entire strategy vault at epicproacademy.com. I used to happily and easily sell this education and training for $997 a year, but now I give it away, and all of the documents, and all of the paperwork too.

God bless to your success. I’m Matt Theriault, living the dream.