Real Estate Investing Basics

How to Make Your Seller Finance Offers FAR More Appealing

Expertise:
193 Articles Written
getting the right seller financing offer accepted

A buddy of mine recently came across the perfect buy and hold property. It’s a quality 3 bedroom, 2 bathroom house in a good location, and the sellers only owe $20,000 on the property.

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So why is this the perfect buy and hold property?
It is because it’s in a solid neighborhood, the house is in good condition and it’s a bread and butter type house that he’ll be able to fill with families for the next 30 years.

When he told me about this property he asked me to help him put together the offers. At first he had a regular cash offer based on the traditional formulas buying at 60 cents on the dollar minus repairs. He then had a seller financing offer where they would finance the place for 5 years and he would have to pay them off at that time; he would get $50,000 in equity with that offer and $200 a month in cash flow.

But once he laid these two offers out to me, he told me that he really hoped they chose the owner financing offer because he wanted to put the property into his long-term rental portfolio. I told him to almost guarantee they will take that offer, he should change his cash offer and make it so ridiculously low that the sellers would think the seller financing offer was a great offer and they’d snap it right up. However, if by chance they took the cash offer he would be looking at a home run, so either way he’s making out pretty good.

I use this technique all of the time. When I come across a property that I want to hold for the next 25-30 years, I make an ultra-embarrassing cash offer. 99% of the time it gets rejected and I end up getting the owners to finance the house for 5-10 years just as I wanted.

But there have been cases when I have had the seller accept my cash offer. And if it ever happens to you, that’s when you need to work on your poker face as you’re shouting for joy in your head “I can’t believe you took it. Holy smokes. Are you sure you heard the number I gave you? Are you positive? I’m gonna be rich.”

So, from now on, take more time when you are putting together your offers and make sure you are planning for the long term in your business. When you come across the perfect bread and butter house like my buddy just did, be smart enough to put it into your rental portfolio so you can live off your rents in retirement.

I promise you that you don’t want to be 75 years old and still wholesaling, while the smart investors just look after their rental properties, collect rent checks, and don’t have to worry where the next deal is going to come from.

Image: jscreationzs / FreeDigitalPhotos.net

    Sharon Vornholt
    Replied almost 8 years ago
    That’s a great article Jason. If you always want your “preferred offer” accepted, I agree that making the cash offer very low is a great strategy. Like you said, either way it’s a win for you.
    Sharon Vornholt
    Replied almost 8 years ago
    That’s a great article Jason. If you always want your “preferred offer” accepted, I agree that making the cash offer very low is a great strategy. Like you said, either way it’s a win for you.
    Gabe Sanders
    Replied almost 8 years ago
    Yes, great strategy when sellers have the equity in the home. Not so good with many of the upside down homes coming on the market today.
    Taylor Jennings
    Replied about 6 years ago
    This is the same strategy I thought about doing haha I’m glad to hear it’s worked for somebody else! I’ll definitely try it out.
    Will
    Replied over 5 years ago
    Great article, I like the two offer system you have. At least the seller won’t have a take it or leave it offer.
    Isaac Rothermel Rental Property Investor from Malvern, PA
    Replied about 4 years ago
    Hey Jason, love how you play the one offer against another as a framing technique. Any suggestions for finding properties that are likely to owner finance?