I'm seeing some interesting things on Craigslist in my area. Several FSBO but no mention that they would carry a contract. Most have a phone number only. When I call and inquire about the property how soon in the conversation do I get around to the financing question. Obviously I don't want to waste their time or mine but it seems a little abrupt to say hi, will you carry a contract on this property. Any ideas/suggestions?
What you really want to do is find out why they are selling, what is going on with them....are they moving, divorce, was it a rental before and they are retiring, etc. Find a problem, then offer a solution to the problem...if you need them to carry paper and they need all cash, it is not a win win, and move on to the next deal. Keep in mind you have a lot different tools available here, and creativity is key.
I always ask if they have a mortgage, and what they need to get out of the deal cash, this will prompt the conversation, and then you can go from there.
Totally agree with Chadd. Ask them what they want out of the deal and what they would do with the money over the phone. If they are looking to or already have retired and are going to put the money into a CD or stocks and they own it outright its worth a visit. If they are getting divorced/moving etc and need the money today then it might be more of a flip situation. Wells Fargo can wait for a few months while you give them 5k to move and flip their house via Subject To. Cheaper than hard money...
Not to mention tax consequences. If they inherited it or its been a rental you can look capital gains as a negotiation point. Consult your tax professional.
Thank you! So cool to hear from those already out in the trenches! I'm going to like this site and hopefully use it to the max!
Have you ever considered making more money than you're asking?
How long have you owned the property Mr Investor? Would you like to make more on the sale and keep your money from the tax man?
So, the property was inherited and you and your sister are in the Trust, what's the best investment you have in your Trust? Really, you know this sale can do much better than that!
Well, you do need some money, did you know some lenders will use your note as collateral and you can still make a higher rate of interest?
So, in two years you really need that college fund, that's not a problem really, part of your note can be paid in a lump sum when it's needed.
Much of risks and headaches have changed today, loans are set over to loan servicers who send you your money, you don't do collections or any administration of the loan anymore.
You know your property better than any lender ever could, it's still your collateral and there are investors who can buy your note so you never have to be concerned about the property.
Chad is right, it's about solving their problem. Find out what the problem is, then fit the situation into the financing alternative you need. The more you know about notes the easier it will be. Good luck :)
Most people don't advertise their problems. That's for reality shows and some social media like Facebook.
Consequent, negotiation and deal making is all about connecting with people who have problems that you know how to solve in return for certain benefits.
Since people don't lead Craigslist ads with "Take my crappy house that's in foreclosure and deal with this (long) list of other problems" you need a system of either targeting those with the appealing problems (to you) or effectively and efficiently screening and vetting people you pursue by initiate contact.
Your "solution" becomes some version of seller financing only when it makes sense to use that tool. Otherwise, it's like buying a new wrench and looking for nut to use it on.
Hint: there are plenty of nuts out there.
I have made more money from 5 nos than the first yes :)
Btw I follow up with hand written post cards
Better than email or phone
Sellers save them :)