Epic Real Estate Investing - The Best Place to Look for the Money | Financial Freedom Friday

Episode Date: June 13, 2014

What stops most people from investing in real estate is the absence of the money they "think" they have access to. What most new investors that apply a little bit of faith discover is that the money for their deals is readily available, BUT! To find it... they must first look for the deal. Once the deal is discovered, the first and most commonly the best place to look for the money is... It's Financial Freedom Friday! ------------------------- Download Matt's free real estate investing course "How to Do Deals | No Money Required" at FreeRealEstateInvestingCourse.com or text FreeCourse to 55678 "Click" what interests you most:  Education Properties Income Coaching Learn more about your ad choices. Visit megaphone.fm/adchoices

It's time for Financial Freedom Friday with Matt Terrio. Hot tip. Your creativity can be a bigger financial resource than actual money. To the point where you don't even need money or access to bank loans. I mean, think about it. No need for money or credit. Just words and imagination. It's kind of like that one red paperclip.

You know the kid who traded from a paperclip to a house in a year? Except this isn't nearly as difficult. If he can do that, you can do this. So hang on to your eyeballs there because my primary method of finding money for my deals, it might shock you. Here it is. First, I look to the seller to provide financing for my deal as opposed to getting a conventional loan or tapping into friends and family.

I look to the seller first. I think it's the first place that you should look and it's the best place. And typically this is referred to as seller financing or seller carryback. Now, listen up, before you roll your eyes or fry your brain trying to figure this out, understand this. There are endless ways to creatively finance a deal using the seller's money. But before you craft your numerical masterpiece, you've got to first know what the seller needs and when they need it.

And you're also going to need to know how much money they owe on the property and if the payments are current. So after you're firm on those items, now you can get to work massaging terms to see how how they can help you help them. So there are three scenarios you're likely to encounter. Scenario number one, free and clear properties, where they own the properties free and clear. And if they own it free and clear

and they're open to seller financing, then that's an easy deal, right? But wait, why would someone want to take payments instead of cashing out? Why would they want money over time instead of getting all their money right now? Well, maybe they don't want to be landlords, but they like the cash flow. Or maybe they're up there in their years and they have no use for a chunk of money, but would

rather live out their days and extra comfort with some extra income. Or maybe they don't want to pay the taxes on the whole amount. Who knows? You know, the reason doesn't really matter either. And I can really tell you there are more reasons than you can conceive of as to why they would do this as opposed to why they wouldn't. So stop trying to figure out why they wouldn't finance the sale and just ask. And that brings me to another tip.

Don't waste your time trying to figure out why a seller won't finance your deal and focus out on figuring out why they will. All right. So scenario number two, an existing loan on the property. You know the properties that you come across, they're not always going to be owned free and clear, they're not going to be that easy. So if there is a loan in place, my first choice is just, let's not complicated. Let's just leave the loan there and transact what's known.

as a subject to deal. Subject to means I take ownership subject to the existing loan. And at the end of the transaction, I'm on title, but the loan remains in the seller's name. Essentially, I've become their loan sitter, I guess you say. I make the payments on time and in full, and then from there, I'm free to flip the property and pocket the profit, or I could rent it out and hold on to it for my own cash flow. So, you know, why would a seller let me be on title while they're still responsible for the loan? Remember, don't try to figure out why they won't, but rather focus on why they will.

Get out of your own way. And don't get caught up negotiating in your mind on the seller's behalf. That's their job. You do yours. All right, so scenario number three, an existing loan and then some. So they got a loan, but they want some money above that. You know, sometimes the seller does want some cash above and beyond the existing loan. And in those cases, I look to the seller again.

and present them with the option to carry back an additional loan. So if they agree, you can keep the loans separate and you can pay the bank and you can pay the seller separately. Or my preference, wrap them all up into one loan using a third-party servicing company who then distributes the payments to each lender accordingly. It's tidy, it's simple, it's safer, and it's my preference. Listen, the more I creatively fashioned deals involving the sellers, the less of my own money that I need, less of my own money that I use.

But understand this is a skill. It takes patience and practice to develop. I mean, you might self-combust in the beginning. No, not really. But stick it out because it is worth it. It's worth it to practice and to get this down. You know, not everyone has the ability to make money appear from the words that they speak right off the back.

But those who can figure it out, they can be found sipping fruity cocktails on remote beaches whenever they feel like it. And that's what I mean. I say it's worth it. You know, doing what you want with your time when you want to do it. That's what practice can do for you. And the majority of my Epicpro Academy focuses on negotiating and creative deal structuring. If you're serious about honing your skills, maybe it would make sense to become a member.

Or not, it's your decision. You mean, you know your situation better than I do. So just go to Epicproacademy.com and decide for yourself. All right, I'll see you next week on another episode of Financial Freedom Friday. It's time for Financial Freedom Friday with Matt Terrio. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.