Mastering Seller Financing: Your Guide to Buying a House without Banks

hello everyone and welcome we're glad you're here tonight's training is brought to you by Chris Goff and Beau manri the founders of the REI pro software my name is Beau Mandarin Krishna we have this mission to help educate you guys and provide you with the very best tools that you can be successful as a real estate investor and now tonight we're taking a deep dive into seller financing if you aren't doing seller finance deals then you really need to pay attention as this is one of the most profitable strategies to have in your toolbox so welcome Chris Goff you're right this is a deep subject yeah but it's one that I'm excited about so that's why I'm like ready to go you know I just see so many people they're just so confused all this it's like you know that's like sub 2 or rap what seller financing and then I'll I'll throw out a video called subordination and people are like what the heck is going on so I want to clear all that up tonight it's it's going to be extremely educational so definitely take notes all right just welcome everyone and uh we're super glad that you've joined us this strategy here is one that's going to build passive income it's also going to set you up for retirement in a very short period of time and it doesn't matter if you're 23 years old or 60 this can all be done in just a few years now everything I'm going to teach tonight can all be done in REI Pro which I'm going to walk through at the end from finding actual deals right now to marketing them running the numbers deciding your exit strategy it's just the most complete system that's going to walk you through the entire buying selling process and this is exactly what we're known for now before I dive into seller financing to me this is so important so important and I call it the three financing techniques a good real estate bargain is defined as buying a piece of real estate in such a way that whatever your intent with the property flipper hold and of course other strategies you are guaranteed to make money obviously we don't want to buy a property and not make money I Define this in three different ways the first way is paying cash and I'm not saying take dollar bills out of your pocket what I'm saying is pay the seller in one lump sum if we do that generally we'd like to get a discount number two is what we call terms and then number three is getting a discount on the price but setting the terms of that agreement which we're going to get into during this presentation so just just hold tight here because this is all going to make sense I promise you I spent a lot of time working how this presentation should be presented the one thing I want you to look at is what we call terms and what does that mean it's simple how much down how much a month and how long can I do it for I want you to think about this how common terms is forget about seller find financing per second almost every major purchase not even does it even have to be a major purchase how many people have an iPhone or an Android that hey I'm going to make payments on this for the next two years and then I'll trade it in and then I'll make payments on it for the next two years what about a home how many people actually go and pay cash slim to none because most people don't have all the cash and the people that have all that cash usually don't put it back into something like this without getting a return on that income what about car purchases jet skis boats campers youth name it we buy things on terms that is the American way how much down how much a month and how long can we do it for right so so if I go and look at this Corvette right so a price this Corvette out a hundred and ten thousand so the salesperson comes up to me it's like hey Chris price on this is a hundred and ten thousand I'm like oh you know I don't want to spend a hundred and ten thousand on this car here right he goes back to the manager he comes back he says hey Chris I got great news you can get into this car with zero down today 18.75 a month and just imagine how good you're going to look on this drive in Sunday afternoons and I'm like hey I could do that right all right sign me up you know I'm thinking about the Sunday drives and you know what he failed to tell me with the interest I'm going to end up paying 135 000 for a hundred and ten thousand dollar car now do we all know this in the back of our mind absolutely but why do we do it because we don't have the cash to just dump into things that we buy you know most of America they live paycheck to paycheck you can't afford to even save up enough cash to go do those things and it makes it very difficult to pay cash so terms how much down how much a month how long week can we do this for really so common in everyone's livelihoods today think about a house a 30-year mortgage if you bought a 350 000 home today seven percent interest 30 years not that most people stay in a home 30 years but if you did you would end up paying in principal payments almost what you've paid for it 488 000 in interest a total of 838 but said almost three times the amount that you actually bought it for and why do we do this because we don't have the 350 Grand think about this the first 12 months on this property look how much interest we pay look at that so the total payment is 23.28 what goes to principal which is going to knock down the balance is only what 287 dollars but 2 000 of that just the first payment straight interest five years at this rate your balance would be 329. you would have made twenty thousand dollars worth of principal payments meaning that's what's going to come off but you paid 119 000 just in interest why do you think the banks have the biggest buildings it's because of Interest how much down how much a month how long can we do it for that's what we call seller financing so the business of creating financing to purchase properties this is going to allow you to sell acting as the bank receiving monthly payments without the use of any lending institution involved in the transaction so not only can I acquire property via seller finance I can sell property via seller finance only if I have the deed a lot of people say Chris I just did a lease option on the house can I sell or Finance it no you don't have the deed the deed is what rules when you talk lease options that's more what I call controlling real estate or seller financing is owning real estate just as much as all those people that own your own home today you get financing from a bank or just getting the seller to finance that which is on paper this is going to work no matter what type of investor you are I don't care if you're just getting started you've been in the business a long time I don't care if you work residential or commercial you're going to find this is more common in commercial you're also going to find this is more common in vacant land if you're a wholesaler the strategy is going to work and I'm going to teach you how to do it if you are a wholesaler if you're a rehab wrapper this is a no-brainer think about what a rehabber does either pay cash or they go and get financing hard money private money or bank seller financing we're going to dictate the terms with the owner so that means you don't have to necessarily put down 20 percent you're not begging for a loan and it doesn't go on your credit report so as a rehabber I could technically sell or finance a home for six months just get the owner hey if the house has been vacant five years what six more months fix up the home put it back on the market and resell it cash the seller out I'm good that's a no-brainer for a rehabber if you work lease options which is one of my favorite strategies this one's just going to make you more money if you're working the pre-foreclosure business this is what you're doing 99 of the time it's a seller financing strategy if you're a landlord this is really the perfect solution at some point you can only get so much financing then you have to look for private money but if I can get the seller to do creative financing meaning seller financing I could then buy as many properties that I can get my hands on so I don't really care what type of investor you are this is going to work some of the benefits for an investor little to no money down low fixed interest rate remember we are deciding the terms with the seller now of course it has to be agreeable right they're not just always going to say zero down one percent interest but we get to dictate that to make sure it's financially going to work for us no Bank qualification we're not going to a bank begging for a loan no credit check could a seller ask you for a credit check sure I could tell you in 20 years not one seller has asked me for a credit check lower closing costs we have a lot less paperwork we don't have the bank financing piece to it it's going to be a lot cheaper it's not going to show up on your credit report like I said so you could buy as many as you get your hands on easy to sell to another buyer why because we already live on terms what's the difference if they go to a bank or if they come to me and do the same thing now I could probably charge a little bit more but I may not have the strict qualifications that a bank would require I can tell you this is my home and I wanted to just share this with you because this is something we do so this is my front and that's my backyard right there this home was vacant 10 years owned free and clear needed some repairs needed updates every piece of furniture in this home was included in the sale arv 1.4 million here's what we did one million on the purchase price 45 000 down the seller asked me how much I could put down I said 45 he said okay that sounds fair you won't know unless you ask four and a half percent interest I offered four percent he came back at five and he's like you know Chris let's just go right in the middle four and a half percent we always amortize these loans generally over 30 years in order to keep the monthly payment low I'm going to show you how to do this part okay and we did it what's called a six year balloon meaning after six years of pain whatever my balance owed after six years I need to cash him out which would either be well think about it I could refinance it if I want to stay here I could sell the property because I have the deed I own it I could refinance it and sell our finance it back out I could refinance it and rent it out I could refinance it and use it as an Airbnb I have options I have so many options when you have the deed and on top of that he said Chris you know what I really like you your family is wonderful don't worry about paying me for six months you all get moved in that's the last thing I want you to worry about and I'm telling you right now when you learn how to do this business when you learn how to follow the steps that we're teaching you how to communicate with people how to build relationships credit check never came up we closed this property in less than 15 minutes at the title company this is a home run strategy and think about this is my home this isn't just something hey I'm investing it and I'll also think about this if I refinance this property I could potentially pull a lot of tax-free cash back out of here what am I going to do with that well there's only one purpose of money it's to make more money if you're that person out there you've watched YouTube video after YouTube video and you're still confused being an investor and doing it this business since 1999 I know that we have crafted over 30 types of seller financing there's a lot of different ways to structure the deal but it really comes down to two ways the first is the seller has no mortgage and the other one is the seller has a mortgage this is going to just change a couple of things other than that it doesn't matter don't think that it's going to change your numbers change how you structure the deal the numbers are the numbers and the numbers don't lie so you have to make the numbers work and I'm going to show you how to do that subject to existing financing every HUD one settlement statement line 203 has this so what it's saying is if you can't assume the loan without qualifying you can still assume the mortgage subject to this will allow the investor to take ownership without notifying the bank we're not calling the bank saying the seller really wants to give me the deed but we're going to get the loan in place now I'm going to tell you some cons on this too so let me get there next is what we call a wrap or a wraparound mortgage and I want you to think of this as secondary finance like there's a first lien in place right now we're creating a second one that literally wraps around the first one as a quick example if the seller has an existing loan balance of 300 doesn't mean it's worth 300 it could be worth four or five hundred they have a balance of 300 the seller can create a wrap around for more than that 300. so 350 400 500 whatever that property is worth and whatever they're willing to sell it for so we're taking keeping the existing Loan in place and then wrapping it okay now if that has totally confused everyone I'm going to simplify it even more for you but when you do this I want you to make sure obviously you need to verify I try to verify mortgage info like pretty much almost every deal okay but this is really important because obviously you don't want the seller to sell it to you less than what they owe all right so let me simplify these two differences in a wrap around to provide a separate loan to those who cannot qualify I don't care if you qualify or not just doing the strategy makes more sense how is it paid the buyer pays the seller whereas in a subject to what you're doing is paying the remaining amount owed we would see this as more common working pre-foreclosures where I'm I'm just going to take over whatever existing debt is on the property I'm going to take that subject too and then I pay the lender I'm not going to allow the seller to make that payment for me in a wraparound generally speaking this is actually really good for sellers because they can create a second lien let's just call it that which is the wrap around and then the buyer then makes the payment set on the terms of that wrap around and then of course there's already an existing Loan in place that the owner and the bank have agreed to which they've paid okay so this is really trying to simplify what these two differences are subject to is not a strategy wrap around is not a strategy the strategy is seller financing if the owner deju the home there's a due on sale Clause so 1982 is when this went into effect so all current mortgages have a due on sale clause which means the lender or could call the loan due if the deed is transferred to another party this is extremely rare and I can honestly tell you I've never personally seen A lender do it I've had numerous attorneys that I've worked with over the years they haven't seen a bank called the loan due when the payments are current now think about this if you're in pre-foreclosure they are calling the lone dude that's what the foreclosure process is but if payments are being made this is extremely rare I want you to think about this if Bo Deeds me the house do you think the bank is going ah you know what there's something going on here Beau owns the house but I keep getting this check from Mr Goff we better investigate this no what do they do they process the payments that's what they do they don't want to foreclose every dollar a bank has to take back from a foreclosure is three dollars just lending General lending car loans other mortgages so this is a huge liability because banks have to be what's called passive they make money by loaning money not taking liabilities in all right so why in the world would a seller agreed to this right well maybe they don't need cash up front I could tell you this is this is a good tip and I I've asked this question numerous times when the seller says no no I need all cash I said well you go about this that only leaves you about 50 or 60 000. what do you plan on doing with that money and a lot of times they have no idea so unless they're going to reinvest it or something a lot of people have no idea I'm like well let's just keep it in place because you're going to make more interest off of doing this deal than actually reinvesting it in the stock market or a rental that doesn't do well something of that nature so a lot of times they don't need cash maybe they can't sell you know this is like the perfect time right now the buyer pool is going down because interest rates are up so now you have people going I don't know maybe I should rent you know that 300 000 house they could afford last year they can't afford this year maybe you can only get a 250 000 house this is a perfect opportunity that we are literally walking into to don't listen all the negativity that you hear out there usually people don't get into real estate until it's all over the news that it's too late you talk to any multi-millionaire today and I guarantee you they're buying up property right now that's your sign not the media obviously prevent foreclosure this is the strategy we're going to use like I said before how many sellers cannot even afford to fix it up I can tell you Bo and I bought a property from a landlord every year he had to keep lowering his rent because he couldn't afford to put money into the property eventually it became so bad that the quality of tenant went down and then there was a like was there a gun shooting or something but I don't know but I know the cops and the firefighters found a gun something on that property I like some drug deals were going on with that one oh I what was it the fire department or police department was like thank you for buying that I think that's the point if you can't afford to fix up the property it's just going to keep depreciating the value it's it's not a good sign think about just an absentee owner somebody that owns the property but doesn't live there maybe they're just getting tired of it maybe they don't want to be a landlord they could get a better return than if they put it in most mutual funds and just general stock market stuff and of course there are tons of other reasons behind this the one thing that you cannot do in this business only because I hear this a lot is quit trying to put yourself inside the seller's head saying well I wouldn't do that you're not them you're not going through I always say real estate deals evolve from situations somebody is going through something in their lives that is forcing them to do something with this property you do not necessarily have to be motivated to want to do this deal which I'm going to show you how to structure these deals to where it makes sense the very first thing we have to do is we have to go find the deal always say spend ninety percent of your time finding deals period hands down this is the number one thing you need to do obviously you can jump into REI Pro which I'm going to jump into we're going to actually pull live deals current for sale by owners listings and rentals what I love about the rentals is that the owner is already willing to accept a monthly payment now it's just a matter if they just want to sell it expired listings local Facebook groups that's how we found the property that I personally live in and of course bring foreclosures which we can also look up in REI Pro I'm going to go through an example like I said it's an example the one thing that I love about this strategy is you can change the numbers so many ways obviously we need to get all the facts and when we run an example even though I'll do it in a specific order some of these things actually happen at the same time which I'm going to explain so found this property they're asking 299 the arv is 325. as you can see there's not much equity in this property the rent value is 2700 and it needs roughly about 15 000 in repair some updates this I call it lipstick stuff and the reason is job loss okay so I want you to put yourself in their shoes not in their head but in their shoes right now you just lost your job some people can go out and get another job very quickly and some can't what can the seller do I want to ask yourself that question what can the seller do right now they could sell it themselves right for sale by owner they could list the home with an agent they could rent the home they could dip into their savings account until they get another job or it could potentially go into foreclosure I want you to think of this because this is a good tip when we start structuring these deals if you list a home and have to pay out a six percent commission even if it's worth 325 it needs lipstick the buyer's going to come down on price and then there's a commission paid what and then there's closing so what is the actual seller end up with it's not like a year and a half two years ago where like there's multiple offers you couldn't even find a property I'm telling you this is a different time and it happened with just the snap of the finger here now what you need to do number one this is what you need to do is what you hear it all the time qualify the seller basically what we're doing here is determining their situation what is the situation the situation is loss of job then we need to visit the home we need to determine repair cost and something not talked about a lot is building that relationship that is huge huge yeah I don't think you would have gotten the six month reprieve on your payment without building that relationship no you know that started with our very first phone call and Bo you were actually there when I made the call and that started building the relationship right there and that continued until I saw the property which he wasn't even here when I looked at the property he had a someone local to you know just kind of taking care of the home opened the door I built a relationship with him and when I talk about building relationships the one thing that I always say is stay in control the one way you could stay in control in any conversation is keep asking questions when the seller starts asking you those questions and you can't talk they're in control and you're not building that trust piece keep asking questions I could there was one property I walked to the front door I literally stood at the front door for five minutes talking to the seller if you can relate to anything that a vehicle they're driving where they're moving to if you've been there before if there's maybe a Furniture piece I want you to talk about everything but the house okay the questions you ask are how old is this what is this what do you think is in repairs blah blah blah the rest of it is really what I'm talking about is building a relationship you can't build a relationship with the house you build it with the owner so ask those questions and then of course we're going to structure the offer we're just going to do all this which is pretty cool all right so structure in the offer I always say this if the seller picks the price you pick the terms if the seller picks the terms you pick the price if the seller picks the terms and the price they're just not motivated follow up with them in 30 days because there's only one thing that will change their mind and that's time people's circumstances change in time hey Chris yesterday I wasn't in divorce but today I am all right so that situation has changed all right so here's the offer we are going to present to the seller okay so they're asking 2.99 but I'm gonna offer 275. I'm going to offer 5 000 down 4 interest rate now the sales price and the interest rate determine the monthly payment we're going to need a mortgage calculator which I'm going to show you how to do this now how many properties can you get in with five thousand down you don't know until you ask I think America is the only place that you never really ask for a discount but if you go to any other country you always barter you have to ask for what's going to make sense for you I'm going to justify where this owner is going to make more money here in just a second and that's the beauty of seller financing taxes and insurance you can see the total amount there per month so my total monthly payment 1703 and I want to do this for five years not 30 years I'm going to amortize it over 30 years I'm going to show you how to do it but I'm going to set what we call balloon payment at five years so whatever balance is owed I need to refinance I need to cash the seller out sell the property or refinance it no maintenance cost or repairs for five years they are literally going to get a check from me every single month principal payments are going to be 12 89.02 times 60 months that's five years total interest fifty one thousand total paid to the sellers 326. so you may be saying yeah you offered 275 but I ended up paying 326 for it when you show the seller how these numbers actually unfold it makes sense doesn't mean they'll take your offer right maybe they want to negotiate but think about this for a second if they say Chris I'm not letting you in this house for five grand down what would you take right ask them what is the least amount you would take because I need to put some money into the property I know there's some repairs that need to be done I don't necessarily want to make a double down payment give you a bunch of money down then have to turn around and put a bunch of money into the property but if they demand a higher down payment what if I lower the price or if they demand a higher down payment maybe I go 10 years instead of five years at the end of the day if the numbers work and I'm going to show you how to analyze all this stuff and that's calculator on the planet that can analyze multiple situations in REI Pro which I'm going to show you but make the numbers work for you you don't have to be greedy why am I being greedy with this offer they're going to make 326 000 off of this right now you also have to think about your exit strategy before you even make the offer if I bought this property what am I going to do with it could you wholesale this property absolutely I could set the terms of a seller finance with the owner and then assign that agreement to an investor how many investors out there would love you for this they don't have to go to the bank the down payment is going to be a lot less and it doesn't go on their credit report it's like duh this makes total sense could I fix the property up and sell it yes could I use it as a rental could I at least option it could I sell or Finance it could I move into it like the property my property I showed you when you sell or finance a property you're getting the deed which means you own the house and I don't care what bank if it's Bank of America or if it's Chris Goff bank I don't care what bank it is you have the deed which opens up every possible exit strategy now our job is to analyze what exit strategy are we going to do in this example I'm actually going to sell or Finance it back out and I'm going to show you how to do that all right so one of the great things with seller financing there's actually for-profit centers see if you wholesale a deal you get paid one time and then you're unemployed if you fix up a house and resell it you get paid one time and you're unemployed if you rent it you'll have passive income most rentals don't even make enough money to pay my light bill you'd have to have tons of rentals but you're looking for the long term this strategy you have for-profit centers the difference in down the difference in monthly the sales price and then my favorite is what I call a discount so let me show you exactly what I mean this is the offer to the seller and it's going to be where our first profit is going to be I'm going to structure the terms with the new buyer I can change this however I see fit as long as it's more than what I'm paying the seller would you agree yes right we obviously need to make money now this buyer maybe they are qualified but they go this route because I might be able to offer a lower interest rate than a current bank or maybe they're not qualified and that's the reason why so you're opening up the entire buyer pool just offering this out there I'm going to ask for 20 down could I ask for more probably what happens if you get a buyer says Chris I don't have 20 000 well how much do you have that's my first response I've got 15. well when could you come up with the other five but we have to make sure the numbers work I'm going to charge interest rate you could play with this what I like to do is set the price set the interest rates I'm gonna try to figure out where that cash flow needs to be for me in this example like I said it's just an example okay that monthly payment comes out to 1858 so here I'm paying the seller that 1289 they're going to pay me this now this is your first profit Center as soon as I bring the buyer in they're giving me 20. I gave the seller five right so that's 15 grand second profit Center is going to be monthly income so each month they're paying me and I'm either paying the seller or paying the bank depending if I did a subject to a wraparound okay the third profit Center is going to be the difference in sales price but you have to amortize this so I did this for you but I'm going to show you an REI Pro how to do it as well so the down payment you could see first three profit centers made fifteen thousand monthly five hundred and almost seventy dollars a month but keep in mind I'm gonna go back I set the term with the new buyer for three years but I have a term of five years with the seller now a lot of people get confused they think they have to go all the way to the five years or all the way to three years no I could sell or finance a house today for five year balloon and cash them out tomorrow there is no prepayment penalty or anything like that so when the buyer gets financing and here's the cool part when you sell or Finance this to a buyer it's not a new loan it's a refi which is a lot easier to get qualified for now of course the the price has to whatever they owe me at the end of three years it's got to be worth it right so you're going to have to have an appraisal done so that 570 dollars per month positive cash flow I sell or Finance it from the owner seller financed it to a new buyer so the taxes insurance that cost carries over nobody it's all break even so I'm not even including that an example here I have no maintenance cost or repairs on this 569. multiply that by 36 months because if the buyer went to the end of the term of three years it's a lot of money I'm going to amortize both loans so remember with the seller I'm buying it at two so let me go back 275 minus the 5 that's 270. I have to amortize that to see where my balance is for three years because my buyer is going to cash me out at three years the buyer I'm doing the same thing 330 minus the 20 they have a 310 000 loan that difference which I've already calculated for you is 42 000 that's a 78 000 profit yes that happened over three years but how many tenant problems did I have none how much maintenance costs and repairs none how much turnover did I have none if they stop paying me I'll just take the property back and do this all over again but let me show you the forth profit Center I've done this so many times and I'm gonna do it like I do it with the seller just for you but I'm going to put the words up here for you too so I want you to keep in mind what do we have with the seller remember the buyers cashing us out in three years so three years have gone but we have a five-year term with the owner original seller so our balance after three years with the seller is 255. when that buyer is ready to cash me out I have to cash the seller out the deal is then cashed out at that moment of time this is what I want you to say to the seller hey Mr Miss seller I know I currently owe you about 255 but I just ran into a bunch of money like a lot of money now if I could pay you 245 today would you accept that or do you want to wait another two years for your money what would you do I could say everybody was like yeah we'll do it today if you did that would just make you another 10 grand now if they said no Chris I want all my money the buyer's still closing with me and I still have to cash the seller out but like I said before don't be scared to ask for a discount if they did that of course they'd make another 10 grand now the only things I'm not taking into consideration only because I want if you're just getting started I want you to understand the concept and some of the numbers we're going to go back through the numbers in REI Pro could there be holding costs did I put the 15 in the property or did I not the closing cost there's going to be other costs associated with that but even if you took that into consideration you're still making a lot of money also think about this for a second if I didn't put repairs in I could have sold it probably for a little bit less than the 330 to the buyer right but let's assume that I didn't for a second how much Bonnie did it really cost me to do this deal I had to put five grand down generally I'll have my attorney draft up the contract so that's another 500 to a thousand could be three grand wherever you live I literally have less than 10 grand invested into this property and I have a potential to make 88 000. it's not on my credit report but this is a home run this is why especially this year 2023 this is all going to move into next year as well I want you to just imagine here if you just did one deal right one deal is great but here's what I always tell my students if you do one deal you could do 10 deals you just did 10 of these identical deals I get it Chris you know hey you're crazy not every deal is the same yeah yeah I got it right some of you make less some you make more just depends on how the numbers work but if you did 10 just multiply everything by 10. so a hundred and fifty thousand in down payment money cash flow is almost 5700 a month times three years we're looking at 205 Grand and then we're looking at the balances of these 427 I mean 577 thousand you just need 10. it's not like you have to go work a million hours you just need to know what you're doing and that's why it was so important to put this presentation together for those that are getting started or maybe you're a wholesaler and you're like man I keep hearing about this I've seen some videos on this I really want to dive in I'm not sure what to do here hopefully this is helping out so obviously the offer gets accepted the very first thing that I do and I recommend everybody especially now you get an attorney draw up the contracts obviously if you have an attorney that does closings I prefer to do the closings there personally because they kind of understand what you're doing this is not I would say it a typical normal close that would happen at a title company but title companies will do it too now your exit strategy obviously will determine what your next steps are are you rehabbing it are you not are you what are you doing with the property and then of course I want you to repeat this process all right so I'm in REI Pro this is our lead Generation section obviously if you're an aria Pro member you know this so I'm going to click this in the menu here lead Pro now I'm going to pick a place I'm going to pick a county you could pick a zip code you could pick small town city whatever you want if you are just getting started now we have tons of lead sources here absentee owner free and clear high low Equity owner occupied pre-foreclosures trusts upside down properties meaning they're upside down on their mortgage vacant properties bank owned potential investors and then vacant land but if you don't know what you're looking for we have this really cool button here called search by strategy when you click that it's going to pull up the strategies I'm going to click seller financing and hit search now once this pulls up as you can see we have 7 100 over 7 100 leads now we have some predefined filters here if I go over to my filter button the very first thing is the lead type so I like to if I were to say hey Chris tell me what is the number one lead type for seller financing I would say absentee owners pre-foreclosures vacant properties potentially now I could actually select vacant and absentee and this is what we call list stacking I could say also in pre-foreclosure as well I want to stick with just the absentee owners for a second so this is the owner that owns a property but doesn't live here now we have selected Townhouse Condo multi-family mobile any piece of real estate that is recorded in the US you'll be able to find in here and if it's not under one of these major categories you could go into this search box so you could actually pull you pull a dairy farm a bowling alley all kinds of things I'm going to stick with single family in this area only because I know there's more of it as I scroll down the estimated value of these properties I like to say this is the middle of the road seller you could go a little bit under in value and a little bit over in value so what we do for you is we actually calculate the median price point for the county and then I go a hundred less a hundred more now feel free you can go in and change this okay it doesn't have to be those exact numbers again remember I'm just talking about the most perfect seller situation potential Equity I put in a hundred percent meaning they own the property free and clear we can structure so many seller finance deals with little Equity but if you ask me what is the best one it would be 100 Equity because it's going to be so much easier to do this deal I'm gonna exclude any helocs and of course especially being in Florida reverse mortgages okay now maybe you're picky and you want to pick certain maybe I want a three two because maybe you want to rehab this maybe you do maybe you don't you could go by square footage lot size a lot of people go to the sold date like hey they've owned it for more than x period of time I'm just telling you I don't really buy into any of that because I know that people sell because there's a situation going on it's not like I don't know yeah maybe today's a good day to sell because you sent me a postcard yeah why not most people that sell want to sell or there's a reason that's forcing them to sell okay so I want you to understand that people sell based on situations situations change every single day and I feel that you will limit the opportunities if you go in and select more than two years or five years especially this business as far as the owners I'm going to go individual own I'm going to just stay away from the company owned it's very difficult to talk to the person that can actually make a decision that's the problem where an individual owned a more likely to actually talk to that person then because it's I want you to remember this because it's absentee they don't live there look at the bottom right here did they live in state or out of state now some people feel that if okay this property is in Florida if the owner lives out of state they're probably more motivated well no motivation only be comes from a situation you could live down the street and go through health issues and need to sell so I always like to just I want as many as I could possibly can get but if you want to maybe build two separate campaigns and kind of test it out maybe you do a campaign and says okay let me just do the in-state versus the out of state feel free to do that I could then apply those filters and that's going to obviously lower our number here so now we're at 995. I want to show you something if you need to fine tune this list like maybe you you like to start with Broward County but and maybe you just don't that so I'm just zooming in okay that's all I'm doing you could zoom all the way to the street level and see all this stuff one of the really cool Parts especially if you're a rehabber where you may rehab properties in like very specific neighborhoods if you just hover over this satellite click over here we're going to click neighborhoods we're actually going to list the neighborhoods for you now if you don't want to see all the neighborhoods of course you can click that off another thing is maybe you want to check the High School boundary lines because you know this is a c minus rating now technically I could just click this and add all the properties that meet my filter criteria only in that one school system you have that ability you also let me I'm just going to get rid of that you can go Middle School elementary as well but most most people they'll go High School level you can also just start drawing on here now that's obviously not really fine-tuned here but you get the point and you can see how many leads are going to fall Within These actual shapes now if I keep scrolling I want to show you another thing and this is getting pretty picky but hey investors you know it's up to you where you like to invest now as I scroll in here of course you can see the purple dots these are the properties that meet our filter criteria now I could just go in and really kind of fine tune this drawing here to very specific pieces now you could do this up to eight times it's another opportunity for you to really gather leads now one last thing before I move this to a marketing campaign I'm going to scroll back now we started with Broward County one other thing that I want to show you see is what we call search by map this is really really important especially if you're on this particular side of Florida so Broward County we see the boundary line I can now search my filter criteria outside that boundary line to maybe pick up some more properties because we usually just don't invest on a boundary line per se a School boundary you might a neighborhood boundary you might but I know that I can invest in multiple different areas so you do have that ability to do it of course you could make this full screen as well now let's just kind of go back to where we were here 995 leads what we need to do is we need to Market these properties I'm going to go up to my action button and in this case I'm going to select all leads you could select a certain number of the 995 as well as if you order postcards through us you could just put it in your budget we'll calculate exactly how many postcards you can mail so if we go there I'm going to select all now you can add this to a marketing campaign you can save all these properties to your saved property section or you can export this list I'm going to add this to a marketing campaign and I'm going to call it Broward and I know that I'm going for seller finance and I like to always put in sorry I like to always put did it again put in the equity percentage when I do this now this is just the name this is just for you I could go in and select seller finance if you already have an existing campaign you could actually add this to an existing but we're just going to create a new list I'm going to add those selected leads now once I do this I'm going to go over to my main menu and I'm gonna select marketing now this top left here this Broward SF that's the campaigns that I just built you have the ability to order postcards you can print letters you could also do bulk skip tracing in this example I'm going to order postcards always have like if you have a large number of mailers to do or leads to Market I always say you know do postcards it's one of the most cost effective ways that you can market now you can go into a single mail or two male or three mailer when you do a multiple type of mail or you could set the frequency you could select a print date I'm going to go over and continue because there's something I want to show so we have over 90 templates so in this particular example I like to use this particular card now we have tons of other postcards you can even upload your own custom postcard this is the one that I'd like we try to cater the language towards the strategy that you're approaching because really it's obviously you gotta have that wow factor the one thing I like about postcards that hit you at the mailbox where do most people with their mail over the trash right but at least with a postcard they're gonna at least look at it real quick especially if it pops but it's really the content on there that's really going to make it a a winner for you now if I hit continue I'm not going to go through this whole process but you could go in and add your contact information so if you have phone number or website or email whatever however you want the seller to contact you you could add that you can put a return address we can mail a copy to you as well okay what is the goal we're marketing people we have to get the message out there otherwise nobody's going to know what you do this is just one way to Market but when I have 995 leads I generally will do a postcard could I then send a follow-up maybe it's a letter or maybe I do a skip Trace as a follow-up any of those combinations is going to work well some people need to be contacted more than one time I see a lot of people they'll put send 50 cards out and they'll sit back and wait save to get a response right like you got you got to hit them at the right time and the more you can send the more likely you're going to run into that moment of time now let's say the seller called us back now I want to actually go to my properties section I'm going to pull a property up here you know the good news is I've already ran the numbers just to speed the process up now for those of you this is what we call the executable step system it's the physical things you have to do in a specific order to close the deal so we're going to help walk you through this process especially if you're just getting started this is huge what holds us back is not knowing what to do next I know this is what I've been teaching we've already contacted the owner send a postcard bin out one really cool thing you do an individual skip Trace here now we have two types of skip tracing we have just kind of a standard basic and then we have a premium skip Trace I can pull all the nearest relatives I can pull their cell phones their emails all that good stuff if they've been deceased obviously if they're deceased I would want to talk to Next of Kin and so forth but one of the things especially if you're just getting started because if you've never done a seller finance deal before I say you're a beginner at seller finance even if you've done 50 wholesale deals we have all the phone scripts here for you you can obviously put in your own custom scripts as well a lot of things that you could do but let's get to running the numbers very first thing that I have to do is run comparable sales right so what has a property sold for that is comparable that is so important now I've already done it and that's where I came up with my after repaired value 325. I'll just give you one pointer here the number one column that you have to look at is square foot real estate is measured by cost per square foot sold it's trying to find the average of something because you know wherever you live if you live in a single family home every house on that street it's just a little bit different in size so you tried to come and I'm not talking about this as an in-ground pool and that has granite countertops those are the amenities and of course that's going to increase the value on that same street we're trying to find that happy middle to determine what something could sell for but that's the number one column of course the other columns are just as important but the number one thing that I want to look for now I'm going to go in and select one thing I do want to note Florida is not what we call a non-disclosure State such as like Texas so if you go to Texas and you go to Zillow they can't publicly show you what a property is sold for on a public website because this is a login we have access to all 50 states to the MLS you're going to get the best of both worlds so you can see like this first comp see well let's go up to the top this first comp a is this little go to button I always like to go and verify pictures like really what was the condition of that property when it sold okay but this was not an MLs sale so that means it didn't come from the MLS so you do have for sale by owner so you have sellers selling properties without using an agent but you can also see the little MLS tag there as well so you can see which ones now of course if you're in a non-disclosure State such as Texas they all say MLS because that's where we're going to get it from now once I do this and run comps and you can filter these comps there's a lot of really awesome filters in here I'm going to go to my seller finance offer now keep in mind you could do a cash offer you could do a lease option offer you could do a seller finance if you're working pre-foreclosures you can work and determine a pre-foreclosure offer here as well but this is what we're talking about is seller financing so I've carried my arv over I've set my price I set my down payment I set my interest rate remember we're going to amortize it for over 30 years we're going to do a five-year balloon we carry the taxes over then I put in estimated insurance which gives us this summary breakdown to your right this is a huge sales pitch to the seller although I'm offering 275 they're going to get totally get paid 326. remember no maintenance costs all that stuff that comes along with you know like a rental would I can pull the amortization schedule there's a button here and I can see my balance every single month up to the five-year Mark at the end of five years that's where if you remember in the PowerPoint my balance was that number there okay but remember we're seller financing it back out so I need to understand my exit strategy so if you go over to Deal Pro I've already saved one analysis here which is a seller finance seller finance you can plug in exactly how you're acquiring the property how you're getting rid of the property which is seller finance and it's going to calculate your cash on cash your return and your cash profit on this you could do this in multiple ways remember what I talked about if you have the deed you have so many exit strategies right what happens if I want to sell flip it or maybe I want to just rent the property out could you not do this and and when I tell you this you're going to think of so many other ways to do this could you sell or Finance it from the owner you have five years rent it out for four years and then do a lease option the last year absolutely there's so many ways that you can analyze these deals and that's going to tell you which direction you want to go as far as your exit strategy so we're taking all that guesswork out of it for you and saying no no here's what it would be in all of these different situations okay so that's how I'm going to analyze all of these numbers now we talked about putting it under contract when we do seller financing we do have some example seller finance agreements here okay and this is for example purposes because I absolutely you kind of need an attorney to draft all this up now if I need to quickly put a seller finance under contract I could use our contract to purchase oh sorry with addendum this third one right here in the addendum I'm going to specify the terms of the actual agreement just if I need to get this thing under contract tomorrow this is what I can do to quickly get it under contract and then I could have the attorney draft it all up like if I'm late on payments you know what could happen this that and so forth okay so it's more official it's going to be a lot longer document our contract to purchase with addendum total is two pages and this is going to get you locked in because if you don't put this under contract right away could the seller sell it to somebody else absolutely and that's why we have what's called Step six which is protecting the deal and then we get into buyers contracts for the buyers closing the deal and then of course payday so we're going to walk you through this whole process the great thing is is that this strategy you should be doing this is going to be a home run strategy for you this year next year and the year after in the next 20 years but especially now I want you to think about it remember I offered the seller a lower interest rate than I could get qualified for today at the bank and you could ask yourself all day long why would they take such a low interest rate they're not really making four or five percent because I put a balloon on it remember when we go back here to the seller finance offer they're making an extra fifty one thousand dollars total interest paid for the five years now of course if I sell or Finance it to a buyer for three years it's going to be a little bit less but if we went the whole five years they're making an extra 51 000 just for saying yes that amount of interest is way larger than the four percent interest rate that I put in here and that's why I say to the sellers what are you going to do with the cash if you sold the property because most people don't own their house free and clear well why don't you just keep it here and make money on it it just makes sense

Channel: Chris Goff

Views: 83,290

Keywords: seller financing, chris goff, chris goff seller financing, creative financing, financial freedom, investing without banks, mastering seller financing, mortgage alternative, nontraditional financing, owner financed homes, property investment, property investment strategies, real estate education, real estate investing, real estate investment strategies, real estate tips, reipro software, sellers financing, seller financing real estate, seller financing strategies

Id: -K0Ypg9ZQjo

Length: 58min 48sec (3528 seconds)

Published: Fri Apr 28 2023