seller financing

6 Replies

It's hard to say there's a 'best plan', because I feel like each seller is different.

I think your best process is:

1) Identify their problem

2) Try to help them solve it

Maybe the problem is repair, taxes, distance, disinterest ... maybe they don't have a problem at all (maybe not great candidates for seller financing).  You can't just go in guns blazing, you have to offer them something they don't have in exchange for the house that they do have.

Be friendly, helpful, and understanding.  Like I said, I don't think the process is as formulaic as "Do A, B, C, Profit!".  It will take some thought, and some effort (especially at first), but once you know what to look for, you'll be able to accomplish what you want much more quickly.

I agree with Jeremy that you need to try and solve the seller's problem, if they even have one. Find out their motivation level. Most stuff on the MLS won't be offering seller financing. You can always ask though. A better source of leads would be to market to people who own their houses free and clear and who are not owner occupants. Finally, I don't think it matters to the seller if you tell them you are looking to use it for a rental. Nothing to hide there at all.

Make sure that you have a steady number of deal flow and you're going for motivated sellers who are ready to do a deal ASAP. 

1. As others have said, find the "pain" first. Then your job is to be the one to solve this "pain" for them. You will be communicating directly to the needs of the seller. 

2. Often FSBO's work better or a property that can't get financed in its current condition.

3. I found the best way is to go in is to go with a cash offer FIRST, then when they negotiate (everyone negotiates in real estate) then you back into / counter with a seller carry as a concession. This also could be done after going into contract, when you get your contractor bids that show that there is more work than what the seller anticipated. 

So in other words, don't offer it right off the bat, but back into it later if the deal allows it. 

4. As a sidenote, make sure that the deal and cash flow of the property allows for you to cover the debt service. I know it sounds like a "duh" but I've seen deals with 100% financing that didn't have the cash flow even after improvements to cover the debt service + expenses + taxes + insurance to make it worth while. 

Good luck! 

James Clark Start off slow with the seller financed negotiation. You don't want to show up to the party with your pants down. Check out some of my letters i have written to owners in the bp fileplace under "letters". Frank

Thanks for the advice Swat. I checked out the letters Frank, really great letters. Going to network with some of the landlords here and pick their brains a little and maybe send some letters out.

I have been studying real estate for a long time and the rich dad books and game and I learned a lot and I have a long way to go. I have been on this site for a short time and I feel that I have a better chance of success. Thanks again everyone.