Epic Real Estate Investing - Owner Financing | 893

Episode Date: January 10, 2020

In this episode, Matt shares the 3 key points of the owner financing real estate. If you get them right, you'll find better opportunities, make more money, and more importantly, they’ll give you a tremendous edge over your competition. 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-Aase.com.

Here's Matt. I just bought my first property with a bank loan. The rest of my portfolio has been acquired with a strategy called owner financing real estate. And a good chunk of those were even sold with owner financing. Today I'm going to show you how I did it because I showed Josh, I showed Nathan, I showed Corey, I showed them all how to do it. And I'm going to show you right now how to do it too. Okay, I'm going to give you three key points when you're considering the owner financing

real estate strategy. Because if you don't understand how to do this, this. Your options will be very limited when you're making offers and you're going to miss out on opportunity. But if you get it right, you'll not only make more money with the opportunities that you already have, you'll have a tremendous edge over your competition. So this guy right here, a client of mine, Josh Miller, he closed 85 transactions last year and half of them were a result of what I'm going to share with you right now. So let's go over those three key points. Point number one, owner financing real estate. What is it? Very simply, owner financing is a financing arrangement

in which the seller agrees to accept installment payments directly from the buyer rather than having the buyer obtain a loan from a bank. Basically, instead of getting a loan to purchase a property, the seller themselves, they step into the bank's role, and instead of making payments to a bank, you make those payments directly to the seller. With this owner financing real estate strategy, the seller is the bank. So now you know what it is. But there are different structures for our purposes here, and that brings us to point number two, the three different types of owner financing structures. One, the free and clear carryback.

Now, the seller owns the property outright in this scenario, meaning there's no existing mortgage on the property. They own it outright. And the seller sells their property to you by accepting installment payments directly from you. Very straightforward, very clean transaction. This is seller financing in its most basic form. Now, number two, the multi-mortgage carryback.

Most commonly, in this scenario, the seller is going to own the property, but there's still an unpaid mortgage on the property. And using the multi-mortgage carryback, this is a way of purchasing real estate where you, the real estate investor, would take title to the property, but the existing loan stays in the name of the seller. It stays in place and in the name of the seller, but you own the property. In other words, you are purchasing the property subject to the existing financing. Then the seller would give you a second mortgage in the form of what's called secondary financing.

In this instance, you would control the property because you would you would control the property because you're on title, you own it. You'd make payments to the first mortgage, the mortgage that's still in the seller's name, the bank, and then you'd make payments to the second mortgage, of which would be directly to the seller. So the multi-mortgage carryback is exactly what it sounds like. There's multiple mortgages in place.

There is more than one mortgage on the property. Number three, contract for deed. Now, this is still owner financing, but it differs from the previous two as the terms of the installment payments is written into a contract. So technically, this is a business transaction as opposed to a real estate transaction. Thus, the seller stays on title until the buyer fulfills the terms of the agreement.

The buyer still will have the full rights of ownership and they'll have full use of the property per the contract, but wouldn't officially appear on title until the final payment was made. So if all this is making sense to you so far, do me a favor. Type the word epic down below in the comments section. Do that for me. That's just really good feedback for me that I know you are getting what you came here for. All righty. So point number three, where?

Where do you find deals like these? Well, it's really pretty simple. In short, you can find them in the exact same places you're finding your other deals already. You just have to present owner financing to the seller instead of the traditional all-cash offer that most people do. But I'm going to show you how I found most of mine. The first way was through direct marketing to landlords. And what I'd do is I'd send them a cover letter introducing myself accompanied by what's called a three-odicy. option letter of intent. Now, this letter of intent would present three different types of

seller-financed options of how I was prepared to purchase their property. And I put my phone number at the bottom, and those that were interested would call me and they'd just tell me which option that they liked best. If you'd like a copy of this letter for your own use, you can now get free access to the EpicPro Academy at Epicproacademy.com. That document, it's inside, as well as video lessons on this subject and more. All of my other contracts and paperwork can be found there too. All righty. So the second way was through realtors. My favorite question to ask a realtor every time that I met one was, do you know of any

listings that would be willing to carry back financing? And every once in a while, I got a yes, but mostly I got nos. And that was okay, though, because what I would do then is I'd take their business card. Realtors love to hand out their business cards. I'd take their business card. I'd drop it into my CRM and that I'd assign a realtor-specific auto-responder that would stay in touch with the realtor on my behalf, constantly reminding them at least once a week of what I was looking for.

And then when one of these seller finance properties popped up on their radar, the realtor would then call me. And the third way was through online classified ads. And I still do this, actually. I set up a custom search for owner financing, seller financing, and seller carryback. And I'd do that in the real estate sections of the classified. And then any time a new property was posted that had any of these words in the title or description, and the custom search would send me an email.

And I'd then call the seller and present my owner financing offer. If you want to get more owner financed ID, is and other creative strategies like this, get free access to my entire strategy vault at Epicproacademy.com. I used to happily and easily sell this education and training for $997 a year, but now I give it away. And all of the documents and all of the paperwork, too. God bless to your success. I'm Matt Terrio. Live in the dream. Yeah, yeah, we got the cash flow.

Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home boy, we got the cash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.