The Seller Finance Strategy Beating Every Bank
This is a YouTube video titled "The Seller Finance Strategy Beating Every Bank" created in July 2025. It features Michael Martin explaining in detail the advantages of using seller financing in real estate investments, contrasting it with traditional bank financing. The content includes a conversation between Michael Martin and others, such as Trevon and an additional speaker, discussing concepts like locked-in interest rates, refinancing, and creative finance strategies in multifamily and single-family real estate. The discussion is educational and focused on real estate investment strategies.
The biggest blessing in my life is figuring out what wholesale real estate was and learning how to buy sh. Then when you start realizing that you're helping the seller every time, like that seller every month on the 20 million dollar asset we were just at, that seller gets a check from us every month for 40 grand a month. Because he's the bank, alright? I don't pay a bank my payment, he is my bank. So I pay him the 40 grand. So that seller doesn't have a tenant, taxes, toilets, nothing. He just gets a check for 40 gr every month in his retirement. Everybody else is trying to live on like a $3,000 pension. That dude's got a 40 grand coming in. It's pretty good. I have a contract with the seller. He's my bank.
Right.
You understand all that?
Okay.
That seller cannot legally raise my interest rate. We're locked in at 4% for 20 years. So let's say that the Fed, which is Jerome Powell and whatever, they raise interest rates, does my payment change?
No.
What about that doesn't affect him, does it?
Who? The seller?
No, because he has it all paid off free and clear. So imagine. Here's the difference.
Okay?
What's this rig cost? Probably $6,000. Okay, so you own this rig free and clear.
Okay.
And I go to you and I go, hey, Trevon, I'll buy this rig from you. The G master lens, the battery pack, all the. Oh man, this thing might be seven grand, maybe eight grand with two Sennheisers on it. So I go to you and I go, hey, I'll buy this from you, 8,000. But I want to pay you $800 a month for 10 months. That's 8,000 bucks, right?
Okay.
And you go. Done. Okay, what did we just structure? We structured a seller finance deal. There's four terms in every seller finance deal. Purchase price, down payment, interest rate, and length of time. You don't know it, but I just structured a zero down, zero percent interest deal with you. So I did $8,000. I'll pay you $800 a month for the next 10 months. So I put no money down, no interest. 10 months make sense?
Cool.
So I could do that with you.
Right. Great.
And you own it free and clear. And you go, you know what I actually pay. I love that. But I want you to pay me 5% interest on the money. So I end up paying you $8,700 over 10 months. Let's just say hypothetically.
Okay, cool.
We're locked in. That's our contract. We're done. You're the bank. You literally the bank. We sign an agreement with each other called a promissory note. I promise to pay you everything that's written down on this note. Therefore, we're calling it a promissory note. Does that make sense? Okay, it's like you remember seeing Dumb and Dumber where they had those little sticky notes are like, oh, I owe you. You want to keep this one? It's 200,000. That's a promissory note. Okay, I owe you money. Let's put it on the sticky note.
Okay, cool.
Versus I go and get a credit car, okay. That's an adjustable rate credit card. And I go buy this from you for $8,000. Rates, interest rates go up. Guess what happens? My credit card, my payments go up.
Right?
That's what people are doing is they're going to banks to buy these apartment buildings. I'm going to the sellers. So the banks, where is their money coming from? The, the Fed is dictating the rates, right? So the multi, these multifamily buyers, they go buy $100 million asset, thinking, well, the rates are really good right now. They' and we could cash flow really, really good. The Fed, the Fed comes in and goes, we're raising rates. And all of a sudden a property that's making 50 grand turns into a property that's losing 100 grand a month. That's traditional real estate.
But you're locked in.
I'm locked in. I don't have to worry about, no. I'm the only one on the YouTubes or any influencer talking about doing it this way. Why? Because everybody talks about, you know, it's like, think about, you know, Sony kind of like took over the eight years. It was like the first guy that decided, I'm going to use a Sony because it is better in low light. He was like a maverick. And then all of a sudden, everybody's using Sony. That's what I've done to creative finance. So I built this community of people using nothing but Sony's and we now look at the people using canons or like, you guys are freaking dinosaurs. So Everybody in the sub2 community has adopted creative finance and we're dominating. I got a text message from Louver, one of the owners club members, and he said he goes dud. I went to a networking event when people find out we're an owners club and in Sub two, everybody swarms us because they're like, you guys are the elite people in the, in the real estate industry. Like, we're not just some Community. We are. We run the industry, which is cool. Okay, so this is the same thing with all multifamily people. What's my game plan on these properties? You buy them, you raise the rents, you sell them to a blackrock. Makes sense. That big one down there, Cool. But that takes five to seven years to like turn over all the tenants. How many properties have we renovated at that. That unit? Or how many units have we renovated out of 160? Did you pick up on that? It was 80. We've only renovated 80.
Okay.
Why have I not renovated the other 80? Because the tenants have not moved out. I gotta wait for those tenants to evolve and move out.
Oh, I didn't think about that.
This is why single family is easier than multi family. Because you got a lot more things.
To do just so you could.
Hell no.
Because that's like stupid.
So I got bills to pay.
We'll fix it as it is.
Yeah.
Somebody moves out and they go, hey, I'm, I'm re. I'm going to re up. You go, perfect. We want to keep you in the property, but we're going to move you to a more updated unit. But your rent's going to go up 200 bucks. Do you want that or do you want to renew in the same unit you're in? So the way we're doing it now is we go, hey, do you want a rate increase of $100 and stay in the unit you're in, or do you want a rate increase of 250 and move to a brand crispy unit? And you're going and playing that cup game.
Right.
You're moving cups around and you're managing that asset. Every time I go down there, there's new things that have been renovated. I don't know anything about it, but that's what's happening in multifamily. And that takes how, how many years? One year? No, some people have two year leases. So think about somebody that goes and buys one of these properties and you're waiting for these tenants to move out so you can renovate them and raise the rents and then sell the property. While you're doing all that, the increase of the interest rates completely destroy you. That's what's happening in multifamily right now.
And then while they're getting destroyed, somebody comes through and they buy seller finance.
Yeah.
So it's just a big game for me.
Yeah. This is why I don't play the interest rate game. I'd rather go buy that thing where the seller gives me 20 million on seller finance or every property I own. You will see I only have locked in dial in interest rates. Either A, 99% of them are directly from the seller, or B, I've owned it so long that I went to a bank and I refinanced all the money out. Let's say I buy a property for 300,000 and seven years later it's worth 700,000. Is it smart for me to have that $400,000 in cash just sitting in that house?
No.
So what you do is you go to a bank and you go, I want to do a refinance, and you get a new loan. Not for 300, but you get a new loan for like, 550. Why? Because then I get to pull a chunk of my money out. But is that income? It's not income. It's a debt. This is how rich people like me never pay taxes. I'm getting a new loan. Who's paying the loan now? The tenant. So the tenants that's in there, I just go get a new. I refinance the loan, and I don't make that payment. The tenants making the payment.
Okay.
And so I Every. Every five to seven years, you pull a big chunk of money out and you go buy more with more debt. You reinvest or you live on it. Like, hey, I want to go. I just put. Last year, I put $600,000 into my Montana ranch, finished my barn, my concrete thing, my pickleball court. I'm putting, like, money into the. I have a full court basketball thing, and it's like a sport court. It's not concrete. It's like, well, it's concrete, but sport court on top. That was like 80 grand. How did I pay for that? I refinanced money out of another property tax free, and I put it into something else. You're just playing Monopoly all day long. Like, even Today, I'm pulling $300,000 out of a property. I'm getting all of that money tax free. So people are like, all these rich people don't pay taxes. Like, you're right. And this is why people like Trump is. Because Trump is also a real estate guy. So he's like, I'm gonna set it up for real estate investors to win because I'm a real estate investor. So I think Trump's a lunatic. But I also know that he makes my life better because I make a ton of money. By the way, you going through this mobile home area, I have flipped so many houses, I've built so many houses. I've done so many things. Somebody's gonna build a property right here. Good for them. This is my neighborhood. I made probably the most money on in my career. I did a YouTube video about this. Yeah, they just started. They started working on it. You see, they put in the new windows on it.
