Ep 159 pt.3 The 5 Big How To's

On this series we are talking about… The big 4 How To’s

How to talk to Sellers about creative financing- First of all, Don’t use the term seller or owner finance. It has a negative connotation. Use terms like payment for equity, are you open to terms or an installment. If you're open then there are multiple options we may be able to offer. I can put together a couple options and you can pick the best for you… Is that fair? If we can get you monthly cash flow without dealing with tenants, would that work for you. Use the same approach with every prospect, we buy properties using cash or terms. Are you open to taking payments for your equity. Let me explain how terms may work for you… With terms you become the bank and therefore we can pay you more for the property, not only top price but also you can continue to make money from interest. I'm not positive, but there may be some solutions that we can offer you that solves your problem. We can put together some offers and then we can present that to you and figure out what works best for you.

How to talk to Agents about creative financing- You need to understand in a hot market this is an uphill battle. You need to get their attention quickly. And it's harder with residential agents v.s. Commercial agents. The Agents need to know how they are going to get paid, first and foremost. Explain up front to the agent that you might be able to pay more than the asking price, you can get them paid up front at closing, and there will only be one agent involved so all the commission go’s to them so they can make more on their listing. Ask if their client may be open to terms and if/why that may not work. Don’t offer a downpayment if they ask, explain that you can put some offers together and see if any of them work for their client. Always ask why they think the property has not sold yet. You want the agent on your side. Always say you can net the Seller more if they choose one of your offers. AND ask if they understand the offer and if they can explain it to you. If not, then ask if you can go over it with their client together. Lastly, show exactly what the Seller will net in total on terms. And make sure your LOI is simple and answers questions up front. Convey all the positives, you want the agent to go sell your solution to their client.

How to write up the paperwork- Agents must use the state approved REPC, it may not be assignable, and may need to use addendums. Every contract needs to explain purchase price, down payment, earnest money, and then if owner financing there should be a separate section to fill out owner financing terms. Also add an addendum stating you are an investor seeking to make a profit, you may be assigning it to a partner, subject to inspection of the property, and closing to occur at your title company, closing to occur by specific date. The agreement will automatically be extended to resolve title issues. Seller finance addendum should be separate, stating terms, payments etc.  The most important thing is to have an attorney look over your REPC and addendums to cover any legal issues that could potentially arise. Don’t get caught up on this step and just ask another local investor for their REPC if you don’t have one.  

How to use down payment-

How to make multiple offers-

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.