Epic Real Estate Investing - Seller Carry Back Mortgage | Creative Real Estate Investing for Beginners | 1013

Episode Date: May 9, 2020

It’s never a money problem that holds you back but rather an idea problem! Creative real estate investing means that you use ideas in a place of money! Hence, Matt shares how to use the SELLER CARRY BACK MORTGAGE in your creative real estate investing in order to achieve the 4th and the ultimate level of control over your investment properties. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

It's never a money problem, but rather an idea problem. That's why they call it creative real estate investing. It means using ideas in place of money. You don't need a lot of money to invest in real estate. You just need a lot of ideas. Boom. We refer to these creative ideas as terms. Terms like equity sharing, options, lease options, agreement for a deed,

seller carryback, subject to wraps, all-inclusive trust deeds, and so much more. But right now, I'm going to show you how to use the seller carryback mortgage. in your creative real estate investing. 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 rei-aise.com. Here's Matt. A seller carryback mortgage is owner-provided financing. With the piece of real estate being a large purchase for most people, it's typical that financing is used by homeowners and investors alike to facilitate the purchase.

Customarily, real estate financing is obtained from a bank. A seller carry-back mortgage is an alternative where the seller steps in and plays the bank's role and provides financing to the buyer in the form of credit. Like a bank, the seller will accept an upfront down payment and periodic payments thereafter until paid off. If you want to keep it super simple, a seller carryback mortgage is really nothing more than an IOU from the buyer to the seller.

And you'll hear a seller carryback mortgage also referred to as seller financing. And you'll see it advertised as either. And frequently as owner will carry, or OWC. When you see those terms advertised, might be something you want to look deeper into. Might even be terms that you want to search for on real estate websites and online classified ad platforms. There are two components or financial security instruments to a seller carryback mortgage. The first instrument is the promissory note, where the buyer formally promises to pay. This note defines the debt and payment terms, like the amount of the debt, the interest rate,

the amount of the payments, the number of payments, and the payment due date, or the matured. date. The second financial instrument is the mortgage. In many states, a deed of trust, deed in trust, or trust deed will be the security instrument used in place of a mortgage. All accomplish the same thing, though. They tie the promissory note or notes to a piece of property, as well as define what the owner can do with the property so long as the debt is in place. The mortgage also defines what the mortgagee will do if the mortgager fails to pay as defined in the promissory note. The mortgagee being the seller, the mortgageor being the buyer. People get that one mixed up all the time, but now you won't. Using a seller carryback mortgage in your creative real estate investing is the same strategy that we

used in the last lesson with an agreement for deed. The primary difference is that the buyer gets title and the deed at closing, and as long as they continue to make payments per the mortgage, the property officially belongs to the buyer, as opposed to the agreement for deed, where the property at this point still officially belongs to the seller. And like the agreement for deed, the key components that you'll want to negotiate are the purchase price as low as possible, the down payment as low as possible, the monthly payments as low as possible, the interest rate as low as possible, and the maturity date as far out as possible. Every component of a seller carryback mortgage is 100% negotiable and is only limited by your

own creativity. Stuff a bank wouldn't even fathom entertaining, like a deferred down. payment or a tiered interest rate or a moratorium on payments so before you begin you're negotiating with a seller make a list of the ideal terms that you'd like to see in your mortgage to get the same list or cheat sheets if you will of 21 creative financing terms that I give to my private RIA's clients 21 creative financing terms that you can negotiate go to epic breakthrough.com where you can download all of them plus 10 deal structure templates for free so you

want to enter your negotiations with the seller with the ideal end in mind for yourself. You probably won't get everything that you ask for in every transaction, but you can get a whole lot more than you'll ever get negotiating with a bank. And when you consider the foundation of every real deal lies within the seller's motivation to sell, you'll likely surprise yourself more times than not with what you do actually get. So ask. If you don't ask, you don't get. Once you've reached an agreement with the seller for their carryback mortgage, note it

in the term section of your standard regular purchase agreement. There's no special purchase agreement for a seller carryback mortgage. Just use the one that you've always been using. And proceed like you would with any other normal real estate transaction. The seller carryback details that you write in the purchase agreement will be enough for your closing agent to draft the promissory note and mortgage documents for you. When your name appears on title to real estate, like it will after you've executed a seller carryback mortgage, you have achieved the fourth level of the first level of.

of control that I was talking about in the last lesson. Agreement for Deed would make up the third level, lease option the second, and assignable purchase agreement or option with the seller would make up the first, and assignable cash sale. The name of the game is control, and creative financing is the tactic.

As a rule of thumb, you wanna work your way from level four to level one when you are buying, and level one to level four when you are selling. By doing this, you are always maintaining the highest level of control. troll. As Nelson Rockefeller famously once said, the secret to success is to own nothing, but control everything. The more control you have available to you, the more options of profit

you have available. A lot more on that to come. See you next time. 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.