LEARN HOW TO SET UP OWNER FINANCING
Learn how to set up owner financing to sell properties fast! Sell quickly without settling for less! You can generate cash flow and streams of income with owner financing and keep repeating the process for huge profits!
What you are about to learn is one of the methods ordinary people with limited amounts of money use to create wealth.
I’m talking about owner financing.
Want to learn how you can make massive profits from bargain real estate? Would you like to buy homes for pennies on the dollar? Or earn double-digit interest rates? Get started today with this FREE mini class on how to prosper beyond your wildest dreams from tax liens and deeds!
HOW TO SET UP OWNER FINANCING – A LUCRATIVE BUSINESS
Many of my student investors use this process and strategy to purchase and resell tax defaulted properties. One shining example purchased 60 properties in 6 years following this exact process and using a contract for sale.
This is not just a nickel and dime business. Although, my example student purchased many properties, he had very little money and he used credit cards to purchase them.
His preferred selling strategy was owner financing on all of them, and his biggest competitive advantage was he purchased the properties for pennies on the dollar at tax defaulted property auctions in many different counties.
The properties were in tax default, and the local governments don’t like it when property owners don’t pay property taxes.
HOW TO SET UP OWNER FINANCING – PROPERTY TAXES
The state legislature has rules which they title as statutes, and the statutes reveal all property owners must pay taxes locally.
The legislature mandates the local county board of supervisors or county commissioners must direct and mandate the county treasurer/tax collector to levy taxes, then collect taxes.
If the property taxes are uncollectible, the treasurer/tax collector is authorized to seize the property and sell it at a public auction to the highest bidder. Then the revenue is used to pay delinquent taxes.
The county does not want the property; the county already owns the schools, parks, and administration buildings.
The majority of the money from property taxes is used to pay county employees, school teachers, police department, and much, much more, so the county will collect taxes and auction tax defaulted real estate to the highest bidder.
HOW TO SET UP OWNER FINANCING – TAX DEFAULTED PROPERTY
This is happening every day across America in over 3,000 counties, and it’s going to happen every single year from now on. Why? Because thousands of properties every year will go to tax auction.
At tax defaulted property auctions, savvy investors purchase properties which the county has discounted to prices of 60%, 70%, and 80% below the tax assessed value.
Now if you can buy properties for cents on the dollar, you know there’s going to be some room, some margin, between the purchase price and what you could resell it for. Reselling it is the challenge.
HOW TO SET UP OWNER FINANCING – SELLING PROPERTY
Today I’m answering your question about how to set up owner financing.
You can buy your own property anytime you want at auction, and you can sell it to anybody you want to sell it to.
If you’re willing to accept installment sales, you’re going to be able to do quite well because now you can not only profit on the property, you can also make a profit on the financing.
HOW TO SET UP OWNER FINANCING – SELLING TAX DEFAULTED PROPERTY
This is nothing new. Owners can sell boats, cars, and mountain cabins at any time. They can also sell tax defaulted real estate.
The biggest advantage you always have with tax defaulted properties is that you’re going to be able to buy the property for close to the back taxes, and there won’t be any mortgage or deed of trust on the property.
Most people are under the impression that they can’t sell their own property or finance their own property. That’s not true. This is perfectly legal and ethical.
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HOW TO SET UP OWNER FINANCING – USING INSTALLMENT SALES
Any title company could guide you and furnish the documentation which will be acceptable at the county records.
Owners want action and want to create income. When they buy these properties, they don’t buy them to hold them. They want to sell them and sell them quickly. So, they advertise, and they’re assertive about their advertising.
Now you can sell your property any way you want, but think about using installment sales or owner seller financing.
HOW TO SET UP OWNER FINANCING – SELLING PROPERTY QUICKLY
Seller financing accelerates that process of income. How does that come about?
Everybody likes to buy an installment. As the seller, you get a small down payment and then accelerate the sale by taking payments in installments.
First of all, no loan officer is needed, so there is no waiting. You don’t have to get an appraisal which can take 2 weeks to a month, and you don’t have to do a home inspection. As the seller, you can pass over all of that and do an installment contract.
HOW TO SET UP OWNER FINANCING – PROFIT MARGIN
Let’s review. My students purchase properties at auctions for 10 cents, 20 cents, or 30 cents on the dollar. They have purchased below the tax assessed value. To accelerate the sale, they price the property below the competition to attract buyers.
And now we’re suggesting owner seller financing.
HOW TO SET UP OWNER FINANCING – COMPETITIVE PRICING
If you pay 20 cents on the dollar, then why don’t you sell it for 50 cents on the dollar and do it quickly? You’re going to get a lot of bids on the property because you’re under the competition.
If you’ll put an installment sale in place, that’s going to accelerate it even more.
So what are am I suggesting? I’m suggesting owner seller financing.
HOW TO SET UP OWNER FINANCING – AN EXAMPLE
Let’s take a look at how to set up owner financing as a math problem, and we’ll do it right now.
First of all, let’s say that the property is worth $100,000. However, you purchased it low at $30,000, so you’re willing to sell it low.
Let’s sell it at a discounted price of $65,000. Now, you know that’s going to get some activity because it’s far below the tax assessed value.
You will want a down payment, so you ask for $5,000 down. What else do you want?
HOW TO SET UP OWNER FINANCING – CREATING SELLER FINANCING
You want to create seller financing, and that documentation can be done very easily with the help of a title company or an attorney.
You’re going to provide $60,000 in financing, and let’s say you want to collect $500 a month. It’s going to take a while for them to pay you, so you give them a term of 10 years.
Now let’s figure this out. If monthly payments are $500, then that’s $6,000 for the first year. For 10 years, it’s $60,000. Well, that’s pretty darn good money. Now add in your $5,000 down payment, and you receive a total of $65,000.
How much did you pay for the property? If you only spent $30,000 when you bought the property, that’s not a bad profit margin.
Keep in mind, you don’t have to sell it for $500 a month; you could have sold it for $750 or $900 a month in installment payments.
Anybody can use owner seller financing, and you can do this as many times as you want.
HOW TO SET UP OWNER FINANCING – BREAKING IT DOWN
A break down of the example 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
We hope you enjoyed Ted’s lesson on how to set up owner financing.
If you want to sell a property quickly, generate cash flow and an income stream for years to come, owner financing accelerates the process. With owner financing, not only do you profit from the sale of the property, but also on the financing.
A title company or an attorney can assist you with the documentation, then it’s a matter of setting your terms for the sale, like selling price, down payment, interest, monthly installment payments, and how many years you will receive the payments.
Now imagine if you could do this with a property that you purchased for pennies on the dollar and got without a mortgage. The profit potential would be enormous! Well, you can do exactly that by purchasing tax defaulted property.
At a tax sale auction, the bidding begins at around the amount of the back property taxes owed, so you can get a property for 10, 20, or 30 cents on the dollar without a mortgage. Combine that with selling it via owner financing, and you have a profit-making powerhouse!
If you’d like to learn more about investing in real estate, 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!