4 Places to Find Properties You Can Buy with Seller Financing

[CashFlowDepot]

When you buy real estate with Seller Financing you don’t need much cash, you don’t need bank loans, and you don’t need private lenders. Most sellers who sell with seller financing will not even ask about your credit.

The down payment, when buying with seller financing, is usually 3% or less. I have bought many properties with seller financing and nothing down. Plus you don’t have any loan fees or points.

Your payments can be structured based on what the house can afford. You can often buy with 0% financing or rates which are much lower than you would get if you had to get financing from a bank. The terms are whatever you and the seller agree to.. like $500 per month for 300 months.

When you buy with seller financing, you can usually close in 1 to 2 weeks. There is no loan application or lengthy underwriter process nor lots of last minute requests for more information.

When you buy with seller financing, if you are not going to occupy the property, you completely avoid Dodd- Frank rules. No qualified mortgage broker is needed when the seller was an owner occupant or if they are only selling one property with seller financing in the year. If you plan to occupy the property, you can still avoid Dodd-Frank rules if you are buying from an owner occupant.

Here are the four best ways to find seller financing opportunities:

FSBO web sites – Sites like www.ForSaleByOwner.com or www.BuyOwner.com are filled with homes being sold by owners. Each website offers access to the seller’s phone number and a way to email them directly. If you focus on properties which have no furniture or very little furniture, these sellers will be more motivated and you will have a much better chance of buying with seller financing and great terms

LakeHouse.com – Many of these homes are second homes which the seller rarely visits. These sellers are very likely to sell with seller financing and great terms. Unlike the FSBO web sites, lake homes are often sold completely furnished.

GoSwap.org – This site is primarily a site for permanent swaps/trades but many of the sellers also offer seller financing. You can do a search for properties being offered with seller financing worldwide or for a specific area. There are currently 100+ homes being offered with seller financing at GoSwap.org – these are homes all over the world. You can contact the seller through the web site. Seller financing is a good way to pick up an ocean front home in Costa Rica, or a ranch in Montana, a house in Florida, or a villa in Italy. Think Bigger!

Craigslist.com Get your virtual assistant to contact every seller (by owner only) to ask if they would consider selling with seller financing. You’ll be surprised how many will say yes! Even if they won’t sell with seller financing, many of these sellers would consider leasing their property to you then you could sub-lease.

Buying with Seller Financing or Owner Financing is the quickest and easiest way to acquire real estate. If you buy directly from an owner occupant (not an investor or real estate agent) you will always get the best prices and terms.

You don’t need to wait until you have 10-20% down. You don’t need to wait until your credit is cleaned up so you can get bank financing. You can buy real estate with seller financing now.

Contact sellers who have properties listed on the sites above so you can buy a house with seller financing this month! But be warned… you will like it so much you will probably never go back to the old, slow way to buying houses.

I have bought hundreds of properties with seller financing and never used bank financing.

Sellers like selling with seller financing too! They can sell faster. Plus, it is a way to generate cash flow to supplement their income.

Best of Success… and Freedom,

Jackie

 

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[BJBossman]

Glad to see your back Jackie.

Your book rocks!

 

[PeeVee]

When you buy real estate with Seller Financing you don’t need much cash, you don’t need bank loans, and you don’t need private lenders. Most sellers who sell with seller financing will not even ask about your credit.

The down payment, when buying with seller financing, is usually 3% or less. I have bought many properties with seller financing and nothing down. Plus you don’t have any loan fees or points.

Your payments can be structured based on what the house can afford. You can often buy with 0% financing or rates which are much lower than you would get if you had to get financing from a bank. The terms are whatever you and the seller agree to.. like $500 per month for 300 months.

When you buy with seller financing, you can usually close in 1 to 2 weeks. There is no loan application or lengthy underwriter process nor lots of last minute requests for more information.

When you buy with seller financing, if you are not going to occupy the property, you completely avoid Dodd- Frank rules. No qualified mortgage broker is needed when the seller was an owner occupant or if they are only selling one property with seller financing in the year. If you plan to occupy the property, you can still avoid Dodd-Frank rules if you are buying from an owner occupant.

Here are the four best ways to find seller financing opportunities:

FSBO web sites – Sites like www.ForSaleByOwner.com or www.BuyOwner.com are filled with homes being sold by owners. Each website offers access to the seller’s phone number and a way to email them directly. If you focus on properties which have no furniture or very little furniture, these sellers will be more motivated and you will have a much better chance of buying with seller financing and great terms

LakeHouse.com – Many of these homes are second homes which the seller rarely visits. These sellers are very likely to sell with seller financing and great terms. Unlike the FSBO web sites, lake homes are often sold completely furnished.

GoSwap.org – This site is primarily a site for permanent swaps/trades but many of the sellers also offer seller financing. You can do a search for properties being offered with seller financing worldwide or for a specific area. There are currently 100+ homes being offered with seller financing at GoSwap.org – these are homes all over the world. You can contact the seller through the web site. Seller financing is a good way to pick up an ocean front home in Costa Rica, or a ranch in Montana, a house in Florida, or a villa in Italy. Think Bigger!

Craigslist.com Get your virtual assistant to contact every seller (by owner only) to ask if they would consider selling with seller financing. You’ll be surprised how many will say yes! Even if they won’t sell with seller financing, many of these sellers would consider leasing their property to you then you could sub-lease.

Buying with Seller Financing or Owner Financing is the quickest and easiest way to acquire real estate. If you buy directly from an owner occupant (not an investor or real estate agent) you will always get the best prices and terms.

You don’t need to wait until you have 10-20% down. You don’t need to wait until your credit is cleaned up so you can get bank financing. You can buy real estate with seller financing now.

Contact sellers who have properties listed on the sites above so you can buy a house with seller financing this month! But be warned… you will like it so much you will probably never go back to the old, slow way to buying houses.

I have bought hundreds of properties with seller financing and never used bank financing.

Sellers like selling with seller financing too! They can sell faster. Plus, it is a way to generate cash flow to supplement their income.

Best of Success… and Freedom,

Jackie

WOW - this is pure gold. Thanks Jackie!

 

[Carny]

What if the owner has a mortgage on the property? I know most have a due in sale clause, has that ever been an issue?

One of the biggest hurdles I've ran into (admittedly I've only tried this a few times) is that the seller wants or needs to cash out. Most often to buy another property. Are you looking for distressed sellers that just want out?

Thanks for the post!

 

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[CashFlowDepot]

Thanks!

GoSwap.org is great for doing research about offshore jurisdictions too. If you're considering moving to another country (like I did) or even another state, GoSwap will give you an idea about how many people want OUT of a country ( like costa rica) with the volume of listings it has and also give you ideas of prices. The size of the country or state has some bearing in this too.

Instead of being a seller, it is always better to be a buyer. Use your existing real estate, jewelery, stocks, boat, etc.... as CURRENCY to trade for something you want.

I'll give you X, if you'll give me Y. It even works for real estate.

it is also a good way to reduce capital gains taxes.

Currently you can use IRC 121 for $250,000 tax free when you sell your personal residence ( $500,000 for a couple) OR IRC 1031 is still available for investment properties... though it will most likely be eliminated in 2015.

If you can't find a good SWAP, you can also sell at your basis to eliminate taxes.

 

[CashFlowDepot]

Carny

Ideally, you are working with a motivated seller. You need to talk to more people than just a few. You will definitely find many sellers who will say YES to seller financing.

On GoSwap.org, 100 of the sellers advertise that they will sell with seller financing. You can find those ads on Craigslist sometimes too. Just make sure you are dealing with the person who lives or lived in the house so you can get the best price and terms. Terms are always much more important than price.

If there is a mortgage, you can still buy with seller financing. The best way to do this is to wrap the underlying loan so the seller gets a deed of trust or a mortgage. It will make them feel much more comfortable than just a straight Subject_to the Mortgage purchase. You pay the underlying loan payment.

The due on sale clause has never been an issue on the hundreds of properties I've bought subject to. You just need to make sure you make the payments on time and keep the insurance premium paid up.

 

[Carny]

Terms are always much more important than price.

Does this mean you primarily use this as a buy and hold strategy? Are you mainly concerned with monthly cashflow? What about an exit strategy?

The best way to do this is to wrap the underlying loan so the seller gets a deed of trust or a mortgage.

I'll do more research on deed of trust. I don't really know what that is. Is their mortgage worth anything? Say they owe $50k and I give them $80k with a wraparound mortgage (is that the correct term?), would they basically have a second mortgage of $30k?

You pay the underlying loan payment.

Do you use a service that lets the seller know the loan has been paid, or do you just start making payments? If you need to speak with the mortgage company for some reason, does the seller have to call or can they add you to the account somehow?

 

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[Carny]

I don't know if you planned on this being an AMA. Hope I didn't bombard you and run you off!

Bump for anyone that is interested.

 

[Stef]

How would this look in reality? Say, I agree with someone on buying the property with owner financing, do they give me the deed? What kind of contract would this be?

 

[HarryR]

you can find stuff just by cold calling newspaper classified ads as well. I put together a sandwich lease option deal like this. I ended up losing out because I did in 05 and the market tanked and I panicked and did stupid stuff.

 

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[100k]

Interesting concept.

So someone owns a property and their mortgage goes from $1000 to $2000/month, they can't afford the new price and don't want to have the property seized by the bank and have a permanent mark on their credit score - so they choose to instead put it for sale on CL (craigslist) with seller financing - and the buyer moves into the property and pays the seller $2k a month or the seller stays in the property and only get $1000 from the buyer and he ads another $1000 and pays that to the bank.

Have I understood this correct?

I think there might be a NEED for a authority website around that niche - where people just do these trades with each other (kinda like a ebay for property owners offering seller financing).

 

[LeftBench]

Great post, very informative. Thanks!

 

[AubreyJ]

Great post and very informative.

I'll have to do some more research, as I am very interested in this. Thanks for the information!

 

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[CashFlowDepot]

Sorry I have been busy for a couple of weeks. I'm available now if you have any questions

 

[Carny]

I'm still interested to get the answers to these questions:

CashFlowDepot said: ↑
Terms are always much more important than price.
Does this mean you primarily use this as a buy and hold strategy? Are you mainly concerned with monthly cashflow? What about an exit strategy?
CashFlowDepot said: ↑
The best way to do this is to wrap the underlying loan so the seller gets a deed of trust or a mortgage.
I'll do more research on deed of trust. I don't really know what that is. Is their mortgage worth anything? Say they owe $50k and I give them $80k with a wraparound mortgage (is that the correct term?), would they basically have a second mortgage of $30k?
CashFlowDepot said: ↑
You pay the underlying loan payment.
Do you use a service that lets the seller know the loan has been paid, or do you just start making payments? If you need to speak with the mortgage company for some reason, does the seller have to call or can they add you to the account somehow?

thanks!

 

[Carny]

That came out funny, post #7 is the one I was referring to

 

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[CashFlowDepot]

How would this look in reality? Say, I agree with someone on buying the property with owner financing, do they give me the deed? What kind of contract would this be?

If you buy a house with seller financing, you do get the deed to the house -- just like you would with any other house purchase. The title company or escrow office will create the note and deed of trust or mortgage which spells out the terms of the seller financing. the note is not recorded but the deed of trust or mortgage is. And of course the Warranty Deed is recorded too so the owner information is on public records.

Speaking of owner. It is always better not to take title in your own name. This is both for privacy and asset protection reasons. Instead take title in the name on an entity or even better a Trust.

 

[CashFlowDepot]

Interesting concept.

So someone owns a property and their mortgage goes from $1000 to $2000/month, they can't afford the new price and don't want to have the property seized by the bank and have a permanent mark on their credit score - so they choose to instead put it for sale on CL (craigslist) with seller financing - and the buyer moves into the property and pays the seller $2k a month or the seller stays in the property and only get $1000 from the buyer and he ads another $1000 and pays that to the bank.

Have I understood this correct?

I think there might be a NEED for a authority website around that niche - where people just do these trades with each other (kinda like a ebay for property owners offering seller financing).

YES, you understood it correctly EXCEPT, you would not want to let the seller stay in the house. The buyer needs to move in.

 

[Rickson9]

I've always enjoyed your posts CFD. Good to read your stuff again. I'm always learning something new when you write!

 

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[IAmTheJeff]

Wow, this all looks so valuable! It's a shame I have about 0 clue what is happening here. I would love to do this, if for no other reason than to buy a house in Brazil or some place crazy!

 

[100k]

YES, you understood it correctly EXCEPT, you would not want to let the seller stay in the house. The buyer needs to move in.

Why not let him stay.... if for example their mortgage has gone up from $1k/month to $1500/month and they just can't afford that extra $500 - what's the point of finding another tenant when the rental price for that area is not going to be more than 900-1000 any ways. Maybe its just dumb logic on my end.

Cheers

 

[IAmTheJeff]

Why not let him stay.... if for example their mortgage has gone up from $1k/month to $1500/month and they just can't afford that extra $500 - what's the point of finding another tenant when the rental price for that area is not going to be more than 900-1000 any ways. Maybe its just dumb logic on my end.

Cheers

That sounds like a reverse mortgage in a sense. So essentially, you're buying from the bank indirectly? Interesting concept...

 

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[Carny]

Why not let him stay.... if for example their mortgage has gone up from $1k/month to $1500/month and they just can't afford that extra $500 - what's the point of finding another tenant when the rental price for that area is not going to be more than 900-1000 any ways. Maybe its just dumb logic on my end.

Cheers

How would you make money? If you let them stay you would have to pay $500/month for them to be there.

If there was A LOT of equity and very little time left on the note it may work in the long run, but it isn't scalable unless you are already very rich.

 

[CashFlowDepot]

Why not let him stay.... if for example their mortgage has gone up from $1k/month to $1500/month and they just can't afford that extra $500 - what's the point of finding another tenant when the rental price for that area is not going to be more than 900-1000 any ways. Maybe its just dumb logic on my end.

Cheers

There have been several court cases where the original owner stayed, you lease back to them. Then they change their mind and want to be the owner again and sue to try to undo the transaction.

If they do stay, make it for a very short term.. like less than a year.