BP 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!)

Learn More about Leon

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

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 80,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

21 Comments

  1. Pingback: My First Ever Podcast with BiggerPockets - Hardworking Penguin | Hardworking Penguin

  2. 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

      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.

  3. 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!

    • 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. 🙂

  4. 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

      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.

  5. 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

      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.

  6. 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)?

  7. Charmene Prescott on

    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 ?

  8. 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!

  9. Joe Klochan

    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.

  10. George Wines

    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.

  11. Julie Marquez

    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!

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