All Forum Posts by: Luther Wilson III

Let’s Go - I know this is gonna ruffle some feathers and get people going 🙂

I know, it’s counterintuitive…  Why would I want the lender to call the note due? 

1.  So I can learn more about the actual process

2.  To help dispel some fears and myths 

3.  In order to strengthen my investment resolve and ability

4.  To figure out whether it’s a good fight to take on with the attorney or not 

Sure thing, @Joe S.

We bought it, renovated it, refinanced and then did an owner finance resale.

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $65,000
Cash invested: $14,000

Contributors:
Phil Shearcroft

BRRR into an Owner Finance Hold

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $65,000
Cash invested: $14,000

Contributors:
Phil Shearcroft

One more BRRR - owner finance deal

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $42,023
Cash invested: $500

A business partner and I purchased this property, subject to the existing financing, for no money down. We did pay some closing costs to get the paperwork done and in order to get the deed into our LLC. From there we sold it, as is, on a contract for deed to a very grateful buyer for $48,000 with $6,000 down and they made payments to us at $600/mth (PITI). The interest rate we charged them was 6.03% and their term was about 10 years. The buyer defaulted after about 18 months and we then sold the property again, as is, to another very grateful buyer on a contract for deed; this time for $52,500 with $5,000 down and they made payments to us at $700/mth (PITI). This time the interest rate was 6.99% and their term is about 8 years. The COC ROI is high and we didn't have to deal with a contractor or a property manager. Creative financing and seller financing is such a great strategy for buying & selling SFH's. :)

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $42,023
Cash invested: $500

A business partner and I purchased this property, subject to the existing financing, for no money down. We did pay some closing costs to get the paperwork done and in order to get the deed into our LLC. From there we sold it, as is, on a contract for deed to a very grateful buyer for $48,000 with $6,000 down and they made payments to us at $600/mth (PITI). The interest rate we charged them was 6.03% and their term was about 10 years. The buyer defaulted after about 18 months and we then sold the property again, as is, to another very grateful buyer on a contract for deed; this time for $52,500 with $5,000 down and they made payments to us at $700/mth (PITI). This time the interest rate was 6.99% and their term is about 8 years. The COC ROI is high and we didn't have to deal with a contractor or a property manager. Creative financing and seller financing is such a great strategy for buying & selling SFH's. :)

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $65,000
Cash invested: $14,000

Contributors:
Phil Shearcroft

BRRR into an Owner Finance Hold

Hey, @Russ B.

It kinda depends on how you structure the note.  You’ll want to talk with a good CPA about installment sales. You may need to coach them a bit or find one that’s already knowledgeable and experienced and who’s willing to assist.  

1. The overall returns on your real estate investments will be higher. On a single family home - If you choose to seller finance it, as opposed to simply renting it out - you'll likely get a sizable down payment and there's no maintenance costs or property management costs during your holding period. The maintenance and upkeep is on the end buyer. Run the #'s - next time you do a pro forma on a SFR investment - go ahead and put a $0 in the boxes for expenses on property management, maintenance, taxes AND insurance. (The taxes & insurance costs are offset by your owner finance buyers monthly escrow payment). See what that does to your bottom line. 🙂

2.  It will be significantly easier to mange your investments and your cash flow. When it comes to real estate investing - it might not get more “passive” than this. Imagine being able to invest in long-term, cash flow properties without having to hire a contractor or a property manager…  Even as a property manager and a project manager myself - I’m telling you to avoid it, if you can. It’s totally possible, if you learn to master creative financing and notes.

3.  As the markets change owner financing becomes an even more effective strategy and hedge.  You too can see better results seller financing properties, especially, in times of increased fear & volatility. Part of it is supply & demand, part of it has to do with interest rates and “credit availability”. Then there’s war and politics… Whatever it is - if you practice owner financing - It could look like larger down payments, higher interest rates and increased monthly payments COMING TO YOU as well - that is, if you’re on the right side of the table. #BeTheBank

When it comes to real estate investing there are a handful of aspects that we tend to hone in on:

1. Capital / Financing

2. Deals / Acquisitions

3. Renovations / Project Management

4. Execution / Dispositions

5. Operations / Cash Flow Management

If you’re currently investing in real estate - what’s your area of expertise and what do you outsource? It’s tough to try and tackle each aspect of the business on your own… Who’s on your squad, who’s got your back and who’s helping you reach your investment goals?

From start to finish there’s a lot of people involved. From the deal finders to the title company to the lenders, appraisers, contractors, leasing agents, note servicers and so on.

Here at Essential Property Services - we specialize in cash flow management, ie, property management as well as renovation project management. Our clients get access to our team and our network of vendors & real estate service providers.

If you’re investing in real estate - here in the Kansas City market - and you’re serious about growing your business - we should talk. Reach out for a consult and let’s come up with a game plan - so that you too can reach your investing goals.