BiggerPockets Real Estate Podcast

BiggerPockets Podcast 013 – Buying Real Estate with Seller Financing and Speculating with Leon Yang

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Traditional cash flow investing and bank loans are the most common methods used for buy-and-hold investors, but it’s not the only way.

Today’s episode of the BiggerPockets Podcast looks at some alternative methods of real estate investing that we haven’t covered in great detail yet on the show, but may help you pick up new skills and ideas for your investing plan. On today’s show, we sit down with Leon Yang, a young investor from the Las Vegas area who fills us in on his strategy to buy homes using seller financing. We also learn how he closely watches the real estate market to ride the “speculation wave” to build wealth through appreciation and time.

A BiggerPockets Podcast Milestone!

Before we get to the show – we want to give a big thanks to everyone who has left us a review in iTunes – we are up to 175 five-star reviews and counting! Also – we have reached 100,000 downloads of the podcast since we started – which is really, really incredible! Thanks so much to everyone who has helped us reach this milestone and supported BiggerPockets on this journey!

Read the transcript for episode 13 with Leon Yang here

Listen to The Show on iTunes

Click here to listen on iTunes.

Listen to the Podcast Here

In This Show, We Cover:

BiggerPockets Podcast _ Real Estate Investing and Wealth Building

  • How to get started when living in a city with high prices
  • Why Leon chose Las Vegas to invest in
  • How to use seller financing to fund your purchases
  • Leon’s primary source for finding seller financing.
  • How to approach sellers and negotiate the best deal.
  • Two things more important than “selling price” in a deal.
  • Speculating in real estate: is it ever okay?
  • Leon’s view on the future of inflation in the US.
  • The first step for new investors.
  • Why now is the best time to invest in real estate.

Links from the Show

How to Buy a Small MultiFamily Property: A Step by Step Case Study
Using BiggerPockets to Grow Your Business – Free eBook
What is Your Real Estate Lifestyle? (Post by Leon Yang)
BP Podcast 006: Investing While Holding a Full Time Job with Arthur Garcia
How to Invest in Real Estate when Everything is Too Expensive
The BiggerPockets Blog
The BiggerPockets Forums

Books Mentioned in the Show:

Rich Dad Poor Dad by Robert Kiyosaki
The Total Money Makeover by Dave Ramsey
The Ultimate Beginner’s Guide to Real Estate Investing by BiggerPockets
Investment Biker: Around the World with Jim Rogers

Tweetable Topics

“Seller financing is about relationships and trust. Build that before negotiating.” (Tweet This!)

“Inflation is a borrower’s friend.” (Tweet This!)

“To be successful, you have to get a good financial education.” (Tweet This!)

“Strike a good balance between real estate and the rest of your life.” (Tweet This!)

“It’s the experiences in life that make life interesting, not how much money you have.” (Tweet This!)

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Learn More about Leon

Leon’s Blog: HardWorkingPenguin.com
Leon’s Facebook

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investors and other real estate professionals, who chat about failures, successes, motivations, and lessons learned.

    Mehran
    Replied over 6 years ago
    Downloaded, Excited to hear this one. It seems these podcasts all come out in just the right time in my REI progression!
    Leon Yang
    Replied over 6 years ago
    Thanks Mehran! Would love to hear how you are doing!
    Nik Parks
    Replied over 6 years ago
    As always, great show, guys! Brandon, I couldn’t help but laugh when you mentioned Dave Ramsey (Financial Peace University was my introduction to the world of investing). I feel the exact same way—I have a dichotomy within and both sides are always fighting. Debt is dumb. But leverage is such a beautiful thing 🙂
    Leon Yang
    Replied over 6 years ago
    I think on one hand debts like credit cards are used for consumption whereas debts like real estate debts are used for income production. You want to minimize consumption as it doesn’t earn you any money. Real estate, on the other hand, can make you a lot of money.
    Nik Parks
    Replied over 6 years ago
    I couldn’t agree more, Leon 🙂 Dave Ramsey, on the other hand, is 100% anti debt—even in real estate. This is where I fundamentally disagree with him. Great show! By the way, I knew exactly what you meant when you were talking about the prices in Brooklyn. I moved to NYC about two years ago. I want to buy my first house this year (looking for a fourplex). My jaw hit the floor when I saw the prices in Queens and Brooklyn. It’s insane!
    Ken Powers
    Replied over 6 years ago
    I hear you Nik! I’m also in Queens and I envy these people who are buying SFHs for less than $150,000. The only property available at that price here are co-ops, and i want no part of them. 🙂
    Brad Friesen
    Replied over 6 years ago
    Once again great Podcast guys. It’s always interesting to hear about other people’s experiences. Some great advice about building relationships and negotiating with sellers for financing. As a Canadian, it can be quite difficult for us to obtain traditional financing for US properties. Because of this, I have also found success buying properties with seller financing. Although, I do look for more profits than just breaking even 😉
    Joshua Dorkin
    Replied over 6 years ago
    Thanks Brad. I appreciate the feedback, and like you, I definitely always aim for more than break-even. I don’t have the stomach for gambling anymore — even when you’re working to put the odds well in your favor.
    Tracy
    Replied over 6 years ago
    Maybe I missed it, but how do you come up with your downpayment money? Also, how are you paying your own rent/mortgage payment and eating if you are just breaking even, or possibly negative on some properties?
    Leon Yang
    Replied over 6 years ago
    Hey Tracy, you’ll be surprised at how much Josh paid me to speak….just kidding! I have capital to invest in. However, there are no money down deals available out there but those are a challenge to find. I have other rentals to supplement the breakeven/shortfalls.
    Nik Parks
    Replied over 6 years ago
    I went back and listened to this episode a second time—love it! Quick question, Leon: do you own in NYC? Like I said above, I feel ‘ya on the prices here! I’m just curious if you still live in NYC or if you moved to Vegas. If you still live in NYC, do you own or do you rent? I’m rethinking my entire strategy (I just can’t find property that works here) and I think I’m going to invest back home in Arkansas (believe it or not, it’s a fantastic place to invest). Is it crazy to be a REI and not own your own residential home (that may have been redundant, but I think you get what I mean)?
    Charmene Prescott
    Replied over 6 years ago
    Leon, Great Podcast ! Having done seller financing deals for apartment buildings in the past… what’s your advice on seller financing for a small boutique hotel ?
    Terry H
    Replied over 6 years ago
    This podcast was really good. I’ll take what you said about financial education to heart Leon. Great show. Terry
    Will
    Replied over 5 years ago
    Thanks Leon, great interview about seller financing.
    Kim Banks
    Replied about 5 years ago
    I loved this podcast – thanks, guys! I am wondering, Leon, if you can discuss the terms of your seller-financed deals. Interest rates? Length of loans? Fixed? I have only tried 5 year interest-only, and would love to hear about yours. Thanks!
    Joe Klochan from Frankfort, Illinois
    Replied over 4 years ago
    I’m listening to all of these podcasts from the beginning and I love them but the trend I’m beginning to notice is that the vast majority of these people started out with a lot of money. Good for them I guess. I would love to have heard his answer to how he measures his success. I think his long term strategy is very solid, but it’s hard to respect entirely if he is spending his family’s money.
    Michelle Cobbs Investor from Copiague, New York
    Replied over 4 years ago
    Great podcast, love the takk on seller finance will be listening again to take notes. Thanks to all. Michelle
    George Wines Rental Property Investor from Denver, CO
    Replied about 3 years ago
    This was a very interesting take on how to invest (leverage as much as possible – bet on inflation/appreciation). I am curious why our hosts didnt ask the question of what-if-deflation? Im happy things sound like they worked out very well for Leon, but I would have been curious to hear his plan in the case of a market with deflation.
    Julie Marquez Investor from Seattle, Washington
    Replied about 3 years ago
    Hi Leon. Thanks for sharing your investing story, I really like your way of investing. I still work full time, and I invest in single family houses that just break even in cash flow. I buy under market value, and they require very little work from me, but I know in 15 years I will own a home fully paid off by the renters. I invest for my retirement, not for current cash flow, and not a lot of other investors share that same point of view. It was nice to hear how do it successfully. I also live in an area that appreciates, and has been for as long as my dad can remember, so I do put my trust into that aspect too. Thanks for sharing your story, it’s refreshing to here about this method, even though Josh gave you a pretty hard time about the idea. I like it, thanks!
    Matt Dunn Renter from New Orleans, Louisiana
    Replied over 2 years ago
    Leon, you’re absolutely right about the education being necessary, while also stressing that to be successful, you just gotta jump in at some point. I hope your buy and hold strategy is working well for you!
    Don Spafford Investor from Idaho Falls, ID
    Replied about 2 years ago
    Great show. Cool that you were able to get started so well with seller financing. I’m trying to find some that way as well. I will follow your advice on how to search for them. Wish I could have gotten into Vegas when you did. The last year alone has had huge appreciation. I’ve been looking there for some time myself hoping to find a good deal. Usually when I do they get sold before I can even put in an offer.
    Alfred Loya
    Replied almost 2 years ago
    Great podcast! I’m taking Leon’s advice right now and am trying to develop my financial education! Thank you Josh, Brandon, and Leon!
    Marvin Harbour
    Replied about 2 months ago
    Fresh off the block here. Just started listening a month ago. Great content so far. Question for Leon and Josh. Im from Detroit and wonder if you guys changed your mind at all about investing in Detroit. During the show you guys said you wouldnt invest in Detroit and a person couldn't even give you free property in Detroit. Are you guys kicking yourselves now considering how much values have appreciated? Just trolling here haha. Looking forward to getting through the rest of the podcasts.