How To Find Sellers Who Say Yes to Creative Financing

Here's a question I hear all the time for this week's Q&A. Hey Chris, how do you actually find sellers who will say yes to creative financing, right? I mean, this literally comes up all the time, especially from people outside not realizing how in demand this is. And I get it. How do you convince them? I get that a lot, right? Listen really carefully here because I think most investors are simply asking the wrong question. You don't need to find some magical list of sellers who, you know, wake up in the morning saying, you know, gee, I hope somebody calls me today and offers me some owner financing or lease purchase options. Of course not, right? That's not the case at all. That's just not how it works. You need to learn how it works and identify a seller whose situation Makes it perfect for creative financing and, and that creative financing makes the most sense. There's a big difference there, right? And there are lots and lots of them out there. Again, especially now as of the time of this filming, crazy demand. So let's get into it. First and foremost, we are not chasing around conventional deals. It's not what we're doing. We're not trying to outbid cash buyers. That's not what we're doing. I run into them all the time still, you know, the wholesalers and the flippers. We're not trying to convince somebody who needs every penny of their equity tomorrow to suddenly take payments for 10 years, right? It's just not what we do. And we don't wholesale and we don't flip. And those are transactional deals. Sorry if you guys that do that, but those are just one-payday deals and that require you to get back on the treadmill over and over again to get paid. We buy on terms. So instead of asking, where do I find sellers who will accept terms? Right? A little different question here. Ask, what's going on in this seller's situation, in the seller's life, that the traditional market isn't solving or providing? Write that down, please, please, please. Because after more than 35 years in real estate, I can simply tell you that the deal is rarely just about the property. That might seem odd to you if you're brand new to these. Very rarely. Is it about the property? The deal is usually embedded in the seller's situation. And you can learn, guys, I'm sitting right here at my desk next to the book. You can learn about this in Real Estate on Your Terms, where we walk through all this stuff, scripts and all. And when you understand the details of this, you start seeing deals that everybody else walks right past. Here's an example. Every single Deal Lab, we have students, and I'll talk to you about that in a little bit, but we have students who say, oh my gosh, I would have thrown away that particular deal you just showed. Recently, Hayes did exactly that. He's a wholesaler and a realtor, and before meeting us, he was tossing leads weekly. He was tossing them away that didn't fit his mold, right? Well, just last month, because of what he learned at Deal Lab, instead of literally tossing away a lead, he kept it, signed the seller to a purchase and sale agreement for a sub-2 purchase with 3 paydays of approximately $60,000 And already closed on the deal. $60,000, guys. He was gonna toss the deal. One deal. I'm gonna let that kinda sit with you for a little bit. By the way, that $60K is on the lower end of our typical 3 paydays. And it's also based on a 2 or 3 year cash out. We did it very conservatively even though he owns it long term, right? He bought it sub-2. But because it's a sub-2, And he owns it, there are so many other pivots and actually potential for some nice payday number 4s. That's another topic, and you'll learn that at the Deal Labs when you come in. Another video, another topic. Okay, let's move on here. Most newer investors want to know, how can I convince the seller? I get this at all the REIAs we speak at. I get it all over the country. I don't want you convincing anybody, as I mentioned earlier. I just want you asking really good questions. Right? Asking questions. That's it. Because we're generally doing one of two things with a seller, right? We're going to solve a problem, number one, or number two, we're helping them accomplish something the traditional market simply is not accomplishing for and with them. That's it. So here's a simple formula. Property, seller situation, which leads to motivation and timeline. Put those together and now you may have a creative opportunity. But if you jump directly, you're on a conversation, you jump directly into owner financing, sub-to, lease purchase before you understand those 4 things I mentioned, you're actually prescribing before you diagnose. And it's kind of ass backwards, right? Think of it, think of this. Here's a facetious but actual example. It's like you going to the doctor. Right? And the doctor not asking you any questions and then jumping right into, okay, take this, take this, do this, blah blah blah. That's what it's like. You'd be like, wait a minute, what's going on? Isn't the doctor gonna first ask some questions of you? Of course they're gonna, right? It sounds silly, but that's like you going at that with the seller and not asking questions. So let's go over a few seller situations, right? Very briefly. First, expired listings. For example, without going too deep here, think about an expired listing for a second. What do we already know about an expired listing? Well, they wanted to sell, right? They put the house on the market. Like, these are basic things. And something clearly didn't work out. It expired. Didn't sell conventionally. Might be price, might be condition, might be functionality, might be financing from a buyer. Maybe buyers just couldn't qualify, right? Maybe the agent just didn't get it done. Maybe the seller situation changed. Okay, we could go on and on with that, right? Perfect. Now there's a conversation to be had because we have some background. So instead of calling up and saying, you know, how low will you go? Or, you know, will you take this cash offer if I can close quick? Or let me tell you all the ways I buy before you even know what's going on. Simply ask, what were you hoping the sale of the property was going to help you accomplish? Right? Pretty open-ended. Or again, kind of general, what do you think kept the property from selling? And then listen. For goodness' sakes, just be quiet for a second. Don't try to fill space. Sometimes, for example, these sellers don't necessarily want less money or need immediate closure. They don't. They just need another way Of getting to their ideal number. And that's where terms become so powerful for you and for them. Now, let's just do a little reminder here, and I hope for most of you this is a reminder about the 3-question formula. 1, where are you going, Mr., Mrs. Seller? By when? And what if that doesn't happen? And that 3rd question is key, and it's going to tell you all of their motivation. Okay. All right, let's move on now. How about for sale by owner? Let's think about that one. People sometimes tell me, oh, Chris, for sale by owners are difficult. They think they can sell on their own. No kidding. That's why they're for sale by owner, right? So maybe they do feel like they can sell, but they've also already raised their hand and said— well, actually, they didn't raise their hand, they screamed, right? They're screaming going, hey, I want to sell my property. Okay, well, that's a pretty good start, right? You know that right off the bat. It's not like, oh, I'm not selling anymore if you're calling an expired. So you might ask things like, what is you selling right now? Like, what's going on? Where are you going after this sells? And what are you hoping to accomplish? Again, open-ended questions, let them go. And eventually, if you want to get to your key question, if you could get the number you wanted, would you be open to receiving it differently? Maybe over time, maybe via owner financing, maybe through a lease purchase. See, again, we're just opening up a conversation here. We're not pitching a strategy before we know anything. And with all these, I encourage you to go into them with 2 thoughts. First, in your mind, mindset-wise, getting on the phone, how can I help? Right? Just how can I help? And secondly, act like you're just chatting with a neighbor. Okay? That's it. You're just chatting with a neighbor. Be natural. Let's move to something pretty cool, especially in this market, tired landlords. This one I love. Why? Well, let's think about it. Landlords understand real estate clearly, even if it's one house. They, they have a general understanding. They understand income. That's why they're a landlord. They understand owning assets, especially if they've been through at least one tax year with their CPA, even if they're new. And they may just be done with being landlords. Why? I mean, we could go through a whole laundry list here, right? Vacancies, Bad tenants, bad experiences, maintenance, 2 AM phone calls. I've had all these properties that need work. Maybe they've been doing this for 20 or 30 years and they just want out. There's no major headaches, they just want out. So if you just are around that list all the time, it works. But here's the distinction: they may want out of the management headache, not necessarily out of the income. Ah, see, can you see the opportunity here? They like the income, maybe they want to be hands-off now. That could be an amazing owner financing conversation, and worst case, an AO conversation, an assign out. You can learn about that in our 3 Paydays course. Okay, real briefly, just 2 more, we'll wrap up here. This was a longer Q&A for you guys this week. Same thing, make no assumptions here. For example, don't assume somebody inherited a house and therefore wants to dump it cheap. Right? Can't. You just can't assume that. Maybe they want maximum value if they inherited it. Maybe there's multiple heirs involved. I've dealt with that. We have— you're not going to convince 10 people if they all want the money, right? Maybe they want the income. Maybe they just want simplicity. So what are we back to? Ask questions and be sensitive to the fact with these that it's likely a family member that they lost, right? Okay. Lastly, I'll just give you one more category here. Distressed or pre-foreclosure situations, right? Distressed would be pre-pre-foreclosure, right? They don't know that they're in trouble yet, or we don't know. Especially here, you got to slow it down a bit. Now, that's tough for me, right? Because I'm just going, going, going. It's all I do every day. But you got to get the facts. You can't be aggressive here. Don't promise something you can't deliver, and understand where they are, what's owed, their timeline. And what they actually need out of this. Sometimes creative financing solves it, sometimes it doesn't. And you need to be willing to, A, say that, and B, be okay with that, right? Okay, let's do a gut check here. Are you looking in your endeavor here, are you looking for houses or are you looking for situations? That's what I want to just switch you up a little bit. They're 2 very different businesses. Good news for you, Most of your competition look at the house first, the property first, and most are looking to lowball it. They're focusing in then on what? Price, ARV, after repair value, repairs, discounting. They have their formula. Fine. But we look for people, they start to realize that we actually care, that we're being human first because we're asking questions about how we can solve maybe whatever they're going through. What's happening here? What are they trying to solve? What are they trying to accomplish? What does their timeline look like? And then, and only then, we structure, right? So please go out there and really care. Speak calmly like you're speaking with a family member or neighbor or friend, and stop asking, where are all the creative financing sellers? Newsflash here, they're not hiding, right? I just talked to you about a few categories and just a few simple questions, but they're not hiding. You're just maybe asking the wrong questions. They're everywhere. Expired listings are everywhere depending on the market. FSBOs are everywhere depending on the market. Tired landlords are everywhere all the time in every market. Inherited properties, distressed, everyone that I went over. And plenty of other situations, by the way. We could spend an hour on different niche lists, which we teach in our community. Your job isn't to convince them, just to hammer that home. Your job is to learn how to ask the best questions. Diagnose, and then structure the right solution. Now, if you want help doing that, there's a link below where you can connect with our team, but I'm going to give it to you here, smartrealestatecoach.com/actionyoutube. You'll speak with our advisory team and they'll walk you through and see what fits best for you, if it fits. But either way, get out there and start having conversations and asking questions because deals come from what? Conversations. They don't come from staring at Zillow and, and staring at computer programs. Let's get after this together.