Coach G breaks down seller financing as a growing opportunity: buyers locked out of bank loans need owner-carried notes, which investors can buy at discounts and resell. He covers buying notes cheap, using Roth and IRA structures to hold them, and attracting IRA money with 8-9% returns over 8 years backed by single-family homes.
Seller Financing Board this morning asked me about a house that might be for sale. Can't sell. The owner has a buyer who has no money and can't go to the bank. The bank doesn't like him, so he carries the note back. 50% of deserving buyers cannot get a loan these days. Independent business guy, self employed, whatever. A little nick on his credit, which most people have these days, can't get a loan. So that's a market for us. And it's grown by 40% in the last year. And these statistics are all exact and I make them up as I go, but these are, this is the market right now. So how does somebody in our business make money in this market? Well, these notes are sold at a discount. So for example, you know, someone takes a loan back. Now he's getting $800 a month for 30 years. Whenever he created this note, he really doesn't like that. So he gets a postcard from someone like me that says, hey, I know you created an $80,000 note. I'll buy it for 60 at a discount. That note can be sold to an investor. It can be kept in somebody's Iraq. There's a really cool little unique strategy also called a Roth tail, because we all have Roth IRAs in here. I'm sure where the Roth IRA with a hundred dollar option could take the back half of that note. So I don't want to lose everybody here. But the bottom line is you can make a brokerage fee upfront, sell it to an investor friend of yours, take the back out of it in your IRA for $100. That's cool. That is a cool little strategy that works today. Let's talk for a second about the IRA money out there. You've got I don't know how many billions, but it's a lot of IRA money sitting there at 1% or less. Or they're losing money. How are they going to feel when you come and say, you know, how about real estate? What about real estate? We create first trustees. On what? On good little single family houses that we understand, we're pros. How about an 8, 9% return for eight years? Really? I can get that? Yeah. 70% loan to value. It's safe. It's a good little house. It rents for more than the payments are. That's a private bank that exists out there. That's unlimited. So if an investor wanted to say, you know, this might be a good time to build a portfolio of properties that cash flow now. So no matter what the market does, you're okay. And, you know, how much are they going to go? I don't know. Half? I don't know. Maybe not at all. It doesn't matter. That's another angle with the seller financing niche that I think is just not really tapped into. So that's my seller finance piece.
