LEARN HOW TO SET UP A SELLER FINANCING DEAL
Learn how to set up a seller financing deal. It’s not that complicated. Just follow a few simple steps to make the most out of the properties you sell!
Everyone wants to make money with real estate. If you know the rules, it’s really doable. It certainly helps if you can buy at the right price, and I’ll give you a handful of ideas about making money before we finish.
I try to tell new entrepreneurs that you make your money when you buy real estate, and when you sell, you collect the money and go to the bank. That statement is somewhat contrary to what others teach. So, let’s investigate.
Want to learn how you can earn massive income from real estate? You don’t even need a lot of money to get started. Would you like to buy homes for pennies on the dollar? Or earn double-digit interest rates? Learn how with this FREE mini class!
HOW TO SET UP A SELLER FINANCING DEAL – ALTERNATIVE REAL ESTATE
For the past 30 years, I’ve been involved in the alternative side of real estate called tax deeds and tax lien certificates.
Buying properties is easy. Over 3,000 counties and 1,400 municipalities in the USA sell tax defaulted properties at public auctions.
HOW TO SET UP A SELLER FINANCING DEAL – DEEP DISCOUNT REAL ESTATE
The bids start at very close to the delinquent back taxes, which could be 10 cents, 20 cents, or 30 cents on the dollar of the property’s assessed value.
The local county treasurer cancels the mortgage or trust deed loan when they auction the properties.
This all translates to investors purchasing for 60%, 70%, and 80% or higher discounts.
HOW TO SET UP A SELLER FINANCING DEAL – SELLING REAL ESTATE
I’m fond of saying anyone can buy real estate, but it takes a genius to sell real estate.
What I mean by that is, buying real estate, even if it’s a bargain, is easy. However, selling requires a marketing mindset. In other words, there’s a skill involved.
HOW TO SET UP A SELLER FINANCING DEAL – PRICE
To start with, pricing the property correctly makes a big difference.
I spend my time teaching newcomers and experienced real estate investors to buy low at the tax defaulted property auctions, where the properties are all bargains, and then sell low so you’re under the competition. I’m sure you can see the advantage.
Then selling is doing a list, meaning multiple things other than calling a broker.
Selling property below the competition is only possible if you purchase below market value for 10 cents, 20 cents, or 30 cents on the dollar.
The assessor makes the rules as to value. The treasurer makes the rules as to low selling prices.
The selling process starts and creates a traction with bargain prices. That’s number one priority.
HOW TO SET UP A SELLER FINANCING DEAL – FINANCING
The number two attraction for bargain hunters, new buyers and even sophisticated investors, is the financial transaction. In other words, seller financing.
Today I’m answering your question about how to set up a seller financing deal.
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HOW TO SET UP A SELLER FINANCING DEAL – BANK FINANCING
Low interest rates attract buyers. Banks have low interest rates. Usually they are the best rates available.
However, the bank has high standards for the borrowers. High standards mean the borrower must have stable employment, and a good track record of paying other loans like credit cards and automobile loans.
The borrower may also need other assets to demonstrate stability.
Most of all, the borrowers need good credit scores. These are called FICO scores. A poor or low score means you don’t qualify for a loan, and you are rejected.
HOW TO SET UP A SELLER FINANCING DEAL – SELLER FINANCING REAL ESTATE
Now let’s talk about how to set up a seller financing deal. How do you do owner financing?
In the business of tax liens and tax deeds, the auction buyers quickly learn to make the property appealing and sell below the competition because their property may be slightly used and abused.
The second priority, if they want to attract buyers and accelerate the sales process will be to create seller financing. The question is how to sell the client on private financing.
HOW TO SET UP A SELLER FINANCING DEAL – SETTING UP SELLER FINANCING
How do you write a seller financing offer?
Setting up a deal and establishing the seller financing terms can be as simple as requiring the new purchaser to only need a small down payment. Additionally, having the ability to extend installment payments short term or long term is a huge competitive advantage.
Credit-challenged buyers make up a large segment of the market. These buyers have low FICO scores. Many have mismanaged their money. Many are irresponsible.
However, there is a whole segment of the market that understands the financing of the deal is much more important than the price of the property or the interest rate.
How could that be true?
First of all, interest is tax deductible from ordinary earnings.
Secondly, appreciation of a property has nothing to do with the down payment or the long-term loan.
Value of real estate accelerates with inflation and the government’s printing of money. The more they print, the more the appreciation.
HOW TO SET UP A SELLER FINANCING DEAL – SELLER FINANCING EXAMPLE
Savvy sellers accept monthly payments, and in a short 10 years, have growing wealth as a result.
An example of typical owner financing terms used in a seller financing contract looks like this:
- Tax assessed value – $100,000
- Purchase – buy low, sell low
- Discount selling price – $65,000
- Down payment – $5,000
- Create seller financing – $60,000
- Provide $60,000 in financing at $500 per month for 10 years
- Monthly payments of $500 first year = $6,000
- 10 years at $6,000 = $60,000
- Add $5,000 down payment
- Total received $65,000
- Purchase price $30,000
Profit on the margin between $65,000 selling price and $30,000 purchase price = $35,000
With this process, you can make big profits, and it’s repeatable!
TAKEAWAY
We hope you enjoyed Ted’s lesson, “How to Set Up a Seller Financing Deal.”
Buying property is easy, but selling property is an art form. The two most important factors in selling real estate are price and financing, and Ted Thomas has developed a system that addresses both.
Price – Imagine purchasing real estate for pennies on the dollar and having a huge profit margin to work with. You’d be able to offer the property at an extremely competitive price, utilizing Ted’s buy low, sell low system for a quick sale.
Financing – Once you know how to set up a seller financing deal, you can generate quick cash flow and income streams for years to come. A lot of buyers don’t qualify for bank loans, and this large pool of prospects provides plenty of good candidates for seller financing.
To do seller financing, a title company or an attorney can provide you with the document, then you set the terms, like the price, down payment, interest rate, monthly installments, and duration of the contract.
As for pricing, where can you purchase real estate at a deep discount? At a tax sale, where properties sell for prices that bargain hunters dream of.
You can buy real estate for 10, 20, or 30 cents on the dollar at a tax defaulted property auction, where the starting bids begin at about the amount of the unpaid property taxes, and you also get the property without a mortgage.
Property taxes are only a small fraction of the assessed value, leaving you with a big profit margin when you purchase at a tax sale.
If you know the rules and do your homework, you can get amazing bargains on tax defaulted real estate! Then by utilizing Ted’s strategy of buy low, sell low and move on to the next property, you can sell quickly and keep doing it over and over again.
If you’d like to learn more about investing in tax delinquent property, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.
Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal one-on-one coaching.
Get started today at no cost with Ted’s FREE Master Class, that reveals the incredible opportunities available in tax defaulted real estate. The class is only about 1 hour of streaming video and contains life-changing information! You can’t afford to miss it!
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