Epic Real Estate Investing - 5 Reasons for Owner Financing | 1046

Episode Date: June 11, 2020

No money down is not a myth! You can make money in real estate with a little to no money at all and owner financing is one of those strategies that does it for you! Therefore, in today’s episode, Matt shares the 5 features of owner financing and how you can use them to make money in real estate with $0 in your pocket! Tune in and find out more!   Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-A's.

Here's Matt. Hey, Epic Investor. It is Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show. And I do this show because I know that most people are living a life of financial sacrifice and betrayal. You know, we've all been told what to do for. financially for our entire lives. And sadly, it's not taking us down the road that we think it is.

So we've built a system that creates an opportunity for one's money to work harder for them than they did for it, saving them and their families from a lifetime of financial stress and financial worry. And that vehicle that makes it available, those types of options, that type of life where you're not worried about money, the vehicle that makes that available to more people and has made it available to more people than anything else is real estate. The stats are there. The dad is there. Real estate works. And I believe everyone deserves a chance. So that's why we're here. And if this is your first time here, glad you found us. If you like what you hear, make sure you hit the

subscribe button before you go. And if this is not your first time here, welcome back. And thank you for sharing this with your friends and family. I really appreciate it. More than 10 years now on the air. and I just wouldn't be here if you weren't spread in the good words. So thank you very, very much. All righty, so owner financing, and we spent the whole month of April talking about creative acquisitions, creative financing. I think we even call it Creative Acquisitions April.

And, you know, the owner financing thing is just, what I like about it so much is it just makes this no money down thing that everyone has been talking about for decades as long as they've been running infomercials. It makes it available to the average person. And it's real. It's tangible. You can do it.

No money down is not a myth. You can make money in real estate with very little to any money at all. You know, it can take some money for your lead generation. It can take some money for your business operations and supplies and some resources and tools and stuff like that. But the actual real estate itself, you know, when it comes to no money down stuff, that's the easy part. You just got to find yourself a motivated seller who has just carrying a little bit too much on their shoulders at the moment. And you come along and you can lift some of that weight off their shoulders and they'll give you

equity in exchange. That's how it works. And owner financing is one of those avenues or one of those strategies that can change your life almost overnight. And when I say overnight, I'm speaking in lifetime terms, you know, a year, right? a year could be the thing that really just breaks it wide open for you. You know, I've got a client, a private client, Enrique, you know, one transaction, boom, had enough money to cover his monthly expenses and now he's in a position to walk away

from his job any time that he wants. He's still working there. He makes good money. He's not going to throw that away. He's no fool, right? But he does walk into work every single day with the option to walking out and never coming back if he doesn't like it. The boss rubs him the wrong way that day. He's like, I'm out of here. And so that's what real estate can do for you. And specifically, when you access owner financing

inside of your transactions, it can happen really fast. And it can happen really easily. And it can happen with very minimal financial resources on your part. And so owner financing, it's no more complicated than when you buy a house instead of going to a bank to find your mortgage, you go to the owner of the property to finance your mortgage. That's it. And instead of making monthly payments to a bank, you just make a monthly payments to the owner. The transaction and the legal process are exactly the same. Just instead of a bank, it's a person, a private person.

No difference. But owner financing, it's so much better for so many reasons. With all the similarities that those two things have, it's just, it's so far ahead. It's not even funny. So I'm going to give you my five favorite things about owner financing, and I think they're compelling enough to inspire you to learn more about it and start incorporating it into your real estate if you haven't already. So number one is everything is negotiable. You know, with a bank, they lay down the law and they dictate the terms and they put it in front of you and they give you a pen and you've got to. two options. You can take it or you can leave it. You don't have much say in the matter.

With a property owner, you have unlimited options. Everything is negotiable. As long as the owner agrees, there's really nothing you can't negotiate as a part of the transaction. Because the owner has a right to sell, trade, or give away what they own, whether that's an old dirt, bike in the garage, whether it's a set of tools, or whether it's their kitchen appliances, whatever it is. And their house is no different. It's theirs. They can do what they want with it if they want to dispose of it.

And so you can negotiate the price, obviously, but also the down payment you can negotiate, the interest rate and the length of the loan. You can negotiate all of that. You can negotiate when it's all paid, how it's all paid. The conditions on what is paid, you were really. only limited by your own creativity. The lack of money will never get in the way of an owner

of finance deal for you. Only the lack of an idea. It's never a money problem, but merely an idea problem. And we call these ideas terms in the world of real estate investing, specifically creative real estate

investing, and specifically, more specifically, when you're talking to an owner, we're talking about terms. And if you'd like a list of 21, one of the most popular creative terms that you can start offering up in your deals, you can go to Epicbreakthrough.com and you can grab copies of the same cheat sheets that I give my private clients, epic breakthrough.com. All right. So that's number one. Everything is negotiable. Number two, and I kind of mentioned this in the beginning, you don't need a lot of money, if any.

You know, as I mentioned, if everything is negotiable, so is the money that you put into the deal. I mean, zero-down deals are not even remotely uncommon. It really just comes down to two things. Two things to make this happen. One, you need a motivated seller. You need a seller with the right motivation. And two, you got to ask for it. If you don't ask, you don't get.

And what I mean by that, I mean, it sounds really simple, but most people won't ever get a zero-down deal because they will never ask for it. because they don't believe anyone would ever go for it. They don't believe a seller would ever do it. You know, indirectly, with that belief system, they are negotiating against themselves. You're negotiating against yourself if you're thinking this way.

They're essentially negotiating the whole deal on the seller's behalf against themselves. So don't do that. Okay? So number three, no qualifying. So step number one. When borrowing money from a bank to buy an investment property is the pre-qualification process. You know, the bank is going to want to know what's your credit score.

Where do you earn your money or how do you earn your money? How long have you earned it from that source? What lines of credit do you have now? How much have you used? How much of it do you have available? Do you have a down payment? How much down payment? How much money do you have in the bank?

All the things banks want. answered to their satisfaction. They want all of that stuff answered the way they want to answer just to get you a pre-qualification letter. And then to actually get a formal approval, the bank is going to take their time digging into your history to confirm everything that you told them. They want to make sure that that's all true. And if they see one blip here or there or for every blip they do notice, you're going to

have to provide an explanation. You're going to be supplying them with an LOE, a letter of explanation. explaining to them that blip. And, you know, you better have a good explanation or no loan for you. It really puts you in a position of where, I mean, you almost feel like you're begging, right? They're making you jump through hoops. You feel like they're asking you to dance. And if you don't dance or don't dance fast enough or don't jump high enough, they're going to pull that loan from you.

And you're so vested in the process, you do all these things. And it's not a really good feeling. With owner financing, you can bypass all of that. I mean, you may occasionally cross paths with a more sophisticated seller that they might ask for a couple of these things to prove that you're lendworthy. But it's very rare. It doesn't happen very often. So no qualifying. You can bypass all of that junk and just tell the bank to shove it.

All right. Number four. Pay full price and win. this is one of my favorites. You know, most investors, they think it's their exclusive job to buy low at a deep discount, to buy with equity already in place.

And if they can't do that, they've determined that it's just not a good deal, and they're not going to move forward with it. They're done. That is their single mindset. With owner financing, you can pay a higher price, even full price,

even more than full price. You can overpay. pay for a property so you can get more deals done. I mean, if you're offering more money, what seller is going to turn away or turn that down? And that's predominantly what most sellers think about. They think about the price. That's all they're focused on. As long as I get my price, I'm good. And, you know, they give little regard to the terms of the sale, little regard to the terms of the loan, little regard to the terms of the documents, of which by controlling the terms of of the sale and the terms of the loan and the terms of the documents,

you can pay the owner double the price and it could still be a very good deal for you. As an example, if I were to pay $200,000 for a $100,000 house, so I'm paying double what it's worth. And let's say I'm able to divide that $200,000 into 500 equal monthly payments. That's what it says in my loan docs. that's a good deal. I've paid double for that house all day long. Because at a market sales price of $100,000,

if I just went the traditional route and paid them what they were asking for, just the fair market value, you'd pay $250,000 for the house with a traditional loan at 5% interest amortized over the same period of time anyway. By paying double my way, you actually save $50,000.

And think how many times you'd beat your competition by always having the ability to pay more than them. I mean, as long as you could control those terms, the terms of the sale, the terms of the loan, and the terms of the document, you'd win just about every single time. And if you'd like to grab 10 different deal templates

to see how this works, to put stuff like that together in where the seller gets their desired price and you get your desired return on investment, you can download those also at epicbreakthrough.com. All right. And speaking about competition, that takes us to number five, my fifth favorite reason for owner financing.

And that is less competition. You see, while everyone in their uncle is walking into a seller's house with one thing on their mind to beat the seller down as low as they can on the price, that's what they're thinking about. And in most cases, they're thinking, I just get this low enough so I can flip. this contract and get out of here. That's just a single solitary focus.

Buy it as low as I can and sell it as fast as I can. And if that's what every person in your market is doing, or the majority of them, and you're armed with this idea of owner financing, you have the ability

to pay more, even double. If you can do that, you don't have anywhere near the competition you may be experiencing right now. So go the extra mile to learn how to put together and present owner finance deals. I mean, a great place to start with just be go back and start at the beginning of April here on the podcast. I went over each one of these different scenarios, these different strategies and techniques in great, great detail. But go

the extra mile to learn how this is done because there's so many more options available to you when you do. And that extra mile, it's never crowded. Never. The air is cleaner. The view is better. the food tastes better, the people are nicer, and the money is just as green and in abundance. So the first step is understanding the different terms at your disposal. What do you have to use, right? What's in your toolbox? And then how do you put them together to create win-win outcomes with property owners?

So they're always getting their price and you're always getting your ROI. And if you'd like to go deeper into that, go to epic breakthrough.com. and what I put together for you, that'll get you started. Epicbreakthrough.com. All righty, so if you found this episode valuable, who else do you know? Someone else in your world

that might also find this valuable. If that person comes to mind, feel free to share this with them. Ask them to click the subscribe button when they get here, and I'll take great care of them. All right, that's it for today. God loves you, and so do I.

Health, peace, blessings, and success to you. I'm Matt Terrio. Yeah, we got the cash flow. Yeah, yeah, we got to. the cash flow. Yeah, yeah, we got the cash flow. You didn't know, home for us, we got the cash flow. This podcast is a part of the C-suite Radio Network.

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