Turn $0 Into Profit with Creative Seller Financing

This explains what a motivated seller is. We're looking for these type of people, okay? In order to find a good deal, you need to look for motivated sellers, okay? We're not looking just for someone that wants to sell. We're looking for someone who has some sort of reason to sell, okay? So it will be your job to talk to sellers to quickly determine how motivated they are. What is a motivated seller, okay? Who are you looking for? A motivated seller is defined as a property owner who desperately needs to sell their property to alleviate the burden and stress the property is causing them. It's either financially distressed, like, you know, a burden, they can't afford it, and they don't have the money, time, or motivation to fix it up. Here's what's important to remember: a motivated seller will gladly trade their equity for peace of mind. I've dealt with a lot of sellers who they know they're selling at a discount, they just don't want to deal with it anymore. Okay, think about that. A motivated seller is eager to sell their unwanted property that's stressing them out to you at a discount just to get rid of the hardship or the heartache that the property is causing them. There are dozens of situations that would cause a property owner to be motivated to be a motivated seller. Okay, number 1, lost their job or facing foreclosure. That's why a lot of people target pre-foreclosure lists. Don't have the money to pay the taxes and they're about to lose in a tax auction due to divorce or bankruptcy. Inherited the property and just don't want to hassle with it. This happens a lot of people, a lot of people inherit homes and they're like, I want to deal with that. We deal with a lot of properties in probate. Moved out of state and it's too hard to take care of it. That's why a lot of people target out-of-state landlords. Burned-out landlords who don't want to fix it up and rent it out anymore. So tired landlords is another great list. That's why people target these specific lists because it's like, okay, there's motivation or there's somewhat, there should be somewhat motivation behind it. It could be any one of hundreds of reasons. That's why it's kind of difficult, right? To know, because it doesn't always have to be any of these. The point is these are properties where the owner is motivated to sell the property. And even though there's equity in the property, they would rather sell it quickly just the way it is, just to get rid of it. To a motivated seller who's facing a hardship, they would rather have peace of mind by getting rid of their unwanted property than to try to keep it and fix it and flip it or rent it on their own. This is where we come in. Okay. That's your target market. Now, the thing is, if you have someone that's motivated and you make them a lowball and they don't accept it, you still have opportunities to make higher offers with creative financing or novations where you're just like, hey, let's partner together on it. And then, you know, if it needs any repairs while we list it, we'll take care of it. So again, that's why I don't— if they don't accept your low wholesale offer, I wouldn't give up on it, but there has to be some sort of reason they're selling. Does that make sense, Henry?

Uh, yes, sir. I find out the property address right here and then he listed with the realtor and then, uh, it, uh, sitting on the MLS for 51 days.

It's on the market right now?

Yeah.

Yeah. So if it's listed with a real estate agent, we usually have to go through the real estate agent. But, uh, again, we'll— after we just did this whole thing, what's the motivation behind him needing to sell? You said it's vacant and he's in— he's behind on his taxes, you're saying? Uh, yes.

Uh, I forgot where I pulled this from, but, uh, Vacant. And then I already drive through this property sometime.

Well, I could call it set appointments or live transfers.

I already called her and then I told her that my partner Nathan Payne will call her either by today or tomorrow.

Yeah. Okay. So what we're going to do is you're going to call her and you're going to, you're going to get her to do a live transfer for me. We're going to practice exactly what I'm showing you. If you can give me the warm handoff, I'm all about that all day. Give me an appointment or a warm handoff, a live transfer. We're in.

Alright, so let's see.

Hello?

Hello?

Noel, how are you?

Good, how are you?

Who's that? Henry. I work with Henry. He's one of the people that work on my company. He told me that you were going to be expecting my phone call. Is that right?

Yeah, I'm in the middle of a meeting, but I just missed it, so you can go ahead.

Oh, you're in the middle of a meeting? Do you want me to call back later? Are you okay?

No, I just need to listen to them. No need to talk.

Okay, okay. Sounds good. Are you at work or something?

Yeah, I just on the voice audio. Day. So whenever there are a conversation, I need to turn that on.

Okay.

I gotcha. I gotcha. Well, kind of tell me a little bit. Henry said you were thinking about selling your property and you're— are you thinking about listing it or you, uh, have you already listed the property?

It used to be listed. I took it down because the listing agent doesn't know how to work on it. So whenever there is an offer, she just leave it for a few days before she actually told me. So we didn't get the enough good offers to go forward. So I just take it listed on Airbnb. It's doing great in Airbnb anyway.

So that's frustrating. That must be frustrating.

Otherwise, I'm not going to sell.

Say that one more time. I'm sorry, I was talking. What?

Because that's a money-making machine. If it's not a fair price, I'm not going to sell.

So you said at the moment the property is a money-making machine. Is that what you said? Yes. Wow, that's amazing. Okay, that's good. That's a good thing that it's making you a lot of money. So unless you get a lot of money for it, you're not going to sell. Is that what you said?

I mean, if it's not a fair price, then I'm not going to sell. So if you have a lowball offer, just don't bother sending me.

Yeah, I understand. Well, let me look at the address really quick. Can you give me the address so I can just check and see what I could be able to pay?

Yeah, 11100.

11100, okay.

Orange River Boulevard.

Okay. So did you get a lot of lowball offers when you had it listed on the MLS?

Yes. So like, uh, $210,000, $220,000. So it's not going to work.

Yeah. So that's probably frustrating. And this one is in Fort Myers, Florida.

Yeah.

Okay. So you were getting offers, were they cash offers or were they with, were they represented by real estate agents?

Most of the time real estate agents.

So let me ask you this. Just, just, I'm just throwing this out there. I still have to do my research, but if I were, you said $210,000 and $220,000 were not going to work for you. If I were to offer you that money, but there's no real estate commissions, no fees, and I pay your closing costs, would that work because you wouldn't have all those commissions and fees in it?

Absolutely. Anything below $300,000, I'm not going to sell.

Anything below $300,000, you said you're not going to sell? Okay, let me look. I'm just— I'm on Zillow right now. I'm just running some comps. I know that it said in 2000 and it sold in 2021 for $285,000. So is that when you purchased it in 2020?

Yeah.

You bought it for $285,000. Is that right?

Yes.

That's why you're not taking any lower because you're like, well, I bought it for more than that. Is that, is that kind of what's going on?

Yeah. And the rent is actually covered twice of the mortgage. The rent is $3,000, mortgage is $1,500. So I found no reason to sell it off.

So you mean Airbnb or the actual rent, like the monthly rent where you're just renting it to a tenant?

I do Airbnb, but beyond 30 days booking. So most of the time that the construction workers or nurse who are going to book for 3 to 6 6 months at a time. This time I have 6 months booking. So after I list it, and then if it's not having any offer, I keep renting it to nurse or construction workers again. So it's another 6 months not being listed.

That makes sense. When you listed it and you took it off, what did you list it for?

I think the last July I listed for $330.

Okay.

You listed it for $300, but if it's not working, it's not going to be listed until the next contract checks out.

Gotcha. Okay, well, I'm just looking at it right now. So 3-bedroom, 2-bath. There's a house right next to yours that's a 3-bedroom, 3-bath. You probably are aware of that one. It's just like right on the corner for $295,000. So that one's for $295,000, but it doesn't, it doesn't really look that nice inside. It doesn't look that updated. And theirs has been on the market for—

I just got remodeled at the end of 2021, new AC. So hopefully that adds a little bit of value on it.

Oh, for your property, you're saying?

Yeah, that property. I got remodeled right after I bought it. Then I put the new AC on, so the whole system was replaced.

Yeah, I'll be real with you. I'm an investor, so the only way I could make an offer like this work is if I were to buy it on terms and make you payments. I could pay more, but I would have to make you pay it in payments instead of all up front.

Well, let's say if it is on terms, it still has to go through escrow because I'm not going to handle transaction all by myself.

100%. You know, we always go through escrow. We don't ever deal with things ourselves because we want to make sure the seller— and we want to make sure we're taken care of too. So would you be open to if we could work out a deal where we purchase on terms? Would you be open to something like that?

I will be open for maximum 2 years.

Okay.

If anything beyond 2 years, it's out of my range. I would rather keep it for long-term investing.

Okay. If we were to work out something on terms, you said a maximum of 2 years, like before we did a balloon payment. Is that what you're saying? Like before I paid it off? What purchase price would work for you if we were to buy it on terms?

Still, uh, at least $300,000. Anything below that, I'm not going to consider.

So $300,000 purchase price and a 2-year balloon. Let's see. I'm just running some math real quick. Did we do, um, let's see, no, uh, no interest payments?

Uh, I need to see your offer first, then I run my math all by myself to see if that's worth it.

Usually what we do is we try to get into these deals if we buy them on terms with no money down. Would you be open? Would that be okay if we paid you $300,000 if we came in with no money down?

Does that mean you don't pay monthly payment as well?

No, I would, I would make monthly payments. I just wouldn't bring any money. I wouldn't bring any money down upfront. I would just start making monthly payments to you.

So if I have monthly payment, is that $300,000 divided by 24?

24? Oh. No, no, it wouldn't be that. So we would, we would have it amortized over 30 years, just like a normal mortgage.

Normal mortgage.

Like a 30-year. Yeah. So it'd be amortized. It would be amortized over 30 years like a normal, like mortgage loan. And we would be making the monthly payments. It would probably be, let's see, we could probably make payments of like $1,400 a month on the property. Pay $300,000, and then in 2 years we would pay off the remaining balance that we would owe, which would probably be around like $285,000 or something like that.

So let me be honest with you, if I'd rather just live on Airbnb for $3,000 a month and wait for 2 years to sell it, and I don't know what price I'm gonna list in 2 years, but it might be—

Yeah, the, the benefit of working with us if we were to purchase it on terms is you wouldn't have to worry about having it as a rental. You wouldn't, um, You know, you wouldn't have the stress if it is stressful at all. You wouldn't have to worry about, you would just be getting mailbox money and we would take care of everything for you.

So is that money will go to escrow and I sold this mortgage to me and every chunk will be kept by escrow?

Everything goes through escrow. Uh, cause we have, we have to get an escrow company involved cause we don't just send you the money directly. It has to go through an escrow company.

So I have quick question. So basically because you don't purchase it right away, I still the one who makes the mortgage payment every month, right?

Uh, well, if we did it through an escrow company, they would be making all the payments. I would pay and they would get— they'd pay for the mortgage. They'd take care of everything. You wouldn't have to do anything because we would have to— we would do it through a, like, a professional company that would take care of the payments.

Okay, it sounds better. Yeah, yeah, you can and send it to my email. Yeah, I probably will send it to your email, you said? Yeah.

Okay, so I'm gonna text you And if you could just text me back your email. So I want to give you my contact info so you have everything. But just to verify the offer that I'm giving you that I'll be more details on, we're talking about a 2-year balloon where we pay off the rest of what we owe in 24 months. Our purchase price is around $300,000 and our monthly payments would be to you would be like around, you know, it'd be around $1,432. Just at the top of my head, that's probably where we'd be. And you wouldn't have to worry about any maintenance. You wouldn't have to worry about any cleaning or anything because we actually were buying the house, so we own it. It's— you wouldn't have to worry about any of that.

Okay.

But let me ask you a quick question. What do you owe? Do you have a mortgage on the property at the moment?

Yes.

What?

All of my property have.

Okay. What's your mortgage? I'm just curious. What's your mortgage payment on it?

So property tax is $100 and then Insurance is about $200. So I would say mortgage interest and principal is about $1,300.

Okay. So basically what you would be doing if we purchased this way, we, you'd be cash flowing a couple, like $100 or a couple hundred a month without having to worry about the property anymore. Let me ask you, I think this is something that potentially will work for us after I run the numbers a little bit more and you're going to run your numbers, but I'm just curious, what would make you interested in accepting an offer like this? If you are, uh, you can just Airbnb it. What is, is there something like if we were able to do this, would this help you out? Like take away some stress or make things easier for you? I just want to know how this would help you.

Well, I have 6 houses total, so I just try to de-risk it just in case the housing market crashed and I don't have 6 houses listed at the same time.

Hmm. Okay. So you have multiple properties. So you're thinking that if you can sell this one off and we can take care of the payments and take care of the house, it would, it would help you from, you know, worrying about all the homes that you have.

Yep. And this one is the cheapest one. I'll let it go first. I have 2 in Jacksonville, all $600,000, 3 in California, all beyond $1 million. So it's too much stress to keep all of them on the same page.

No, I get that. And are they all listed at the moment or are they, uh, cause I might— Okay. Cause I might be interested in looking at more and buying them like this. If this is something you're open to.

Yes. You can look at my 2 houses in Jacksonville if you are really interested in Florida.

I am, yeah.

Or I can text you in the future, not right now. My property in California is doing great, so I'm going to keep it for a while, but I'll text you whenever I want to sell it.

Yes, please do. And by the way, my name is Nathan Payne. I know it's the first time we talked. Henry, I work with Henry, so I'll text you. Just text me your email. I'll send you my offer over and send me over those other properties I can look at, and I'll make you an offer on those as well.

All right.

Thank you. I appreciate it.

Yep. Thank you. Talk soon.

Yep. Bye. Okay. So for everybody that was watching that, so this is the next step. Great job, Henry. I mean, wow.

Bye, Nathan Payne.

Look at that.

That you offer her on a seller by finance, right? I hear some term like that.

I just offered her nothing down, like at a 4% interest rate to take over her mortgage for 2 years. And apparently you can rent out for $3,000 and the payment is just $1,400 that we'd have to pay her, we would be cash flowing like $1,600 a month. Dang, dang, Henry, we're about to do this deal together, boy. Yeah, so I'm gonna send her this. So let's go over this. I'm gonna make a copy. We're gonna call this, uh, offer options for Noel. Her name's Noel, correct?

Yeah, N-O-E-L. Yeah, that right.

Okay. So you just make another offer option, property address. Let's go right here. The address right here.

Yeah. So I actually, uh, yesterday at midnight, right? So I'm looking through the Facebook real estate group and then, uh, I saw her post and then, uh, I say, okay, let, uh, let's call her and then, uh, let's Nathan Payne help me out.

Yeah. Freaking let's go. And, and, uh, let me just make sure I understand. So you, you saw, you got this from Facebook?

Yeah, so I'm, I'm, I'm joining many real estate Facebook groups, and then yesterday when I searching through that, and then I see her post, and then she say that she listed her property through agent before, and the agent ignore her, like they don't pick up her phone call and then text message like that. And then she fire that realtor, and then she asking for— she posting that looking for another listing agent. But I know that she's going to get a lowball offer again. So I think like, let Nathan Payne help her out. Yeah.

Yeah. There you go, brother. I love it.

And I love it. Yeah. And actually, I want to learn how to do a sub 2 and then a seller finance 2 when they deny my cash offer.

So all you have to do, Henry, is you just got to look at whatever payment you agree to pay them, is it going to be less than what you can rent the property for? Right. So she's saying that hers rents out for $3,000 a month. I don't believe that. But if we just look at what rents are going for in this area and by the way, this obviously before you buy a house, you do a lot more research. So we're going to do more research on it. But if you look at what's for rent in this area, you got $3,300. Our house is here, so you can't always compare, but this is $2,600. And look at this, like ours isn't necessarily like that, but it's a 2-bed, 2-bath. Ours is a 3-2 and it's $2,600. So this one is $1,600 and this is an apartment. So if we pay her $1,432 a month and this apartment goes for $1,600, I'm just looking quickly, but it does seem like a good deal for rent out there.

Yeah, I think on that property, she mainly do Airbnb. She don't rent out to other people.

Look at that, $2,000. I'm always skeptical about things like this, but but we're just checking it out. Okay, so I'm trying to show you that if we buy this for $300,000 and the annual interest rate, let's just, we just put it at 4%. We didn't put any money down. That's how much we would pay every month, $1,432 on the payment. Okay, and that's what it's really whatever you can agree on. So I said, hey, I'm not going to bring any money down. Honestly, Henry, like this is an amazing deal. Like you don't have to put any money down and you get a property that you can rent out. Yeah, so this is the offer that I would make her. So let me put this into the offer. So the price is $300,000. We're giving her what she wants. Option consideration, honestly, monthly payment is going to be $1,432 monthly payments.

Yeah. What is a balloon payment, by the way?

That means that in 2 years, when we— after 24 months, we're going to have to pay off the rest of the house, which means we're going to owe $289,219. That's how much we're going to have to pay her in 2 years. Does that make sense?

Oh, I'm missing now.

That's, that's the balloon payment. So if she gave us, if she gave us, you know, 5 years, it would be $60,000. And that's what we would owe her. And let's say we sell this house in 24 months for $350,000. Then we would make the difference of $294,000 of what we owe her and $350,000. And for all that cash flow we would have made in the, in the different, in the in the meantime. Oh, wow. So that's why seller finance is cool, because if you can get into a house without any money, rent it out, cash flow, sell it later, you made all that money. Mm-hmm. Oh, wow.

Wonderful.

Let's see. Thank you for taking the time to explore our offer. We hope you see the benefits of price, convenience, and security that we have worked to create in our program. We look forward to working with you soon and making the sale of your home a stress-free and easy one. Call me if you have any questions and want to discuss options. Thanks for your time. Okay, so something simple like that. Like, we don't, we don't need to get too, too crazy. I'm going to take this. I'm going to make it a PDF and I'm going to email it to her. And let's see if she responded with a text. I sent her an email saying, hey, these are my offer terms. So this is my letter of intent. Property address, blah, blah, blah. We can buy your home any of the following ways and close through a real estate attorney or title company. Owner carry program. If option 2 doesn't work for you, we can keep the existing loan in place and pay you the difference between the existing loan and price below at closing. Purchase price $300,000, monthly payments of $1,432, 2-year balloon, no money down, and technically this is 4% interest, but I'll explain that in the paperwork we're about to do. So she said, this is what she said to me. She said the terms agree with what we talked over the phone. We can move forward. I have 2 other properties, blah, blah, blah. If all is good, please ask escrow company to work on the paperwork. I look forward to working with you. So she agreed. It's freaking that simple. And the property rents for like $2,000 to $3,000 a month in Fort Myers. So great deal, right? It sounds too good to be true. So we're going to get it under contract and we're going to see— we're going to see what else happens. Okay. All right. So, Henry, Right here is the seller addendum. So there's a lot of ways to fill out seller financing paperwork, but I use an addendum, okay? And I just write out what the terms are in the addendum, and it's as simple as that, okay? So I'm going to fill this out for everyone, all right? So make a copy. So we're going to call this seller finance addendum, and this will be Fort Myers, okay? So I'm going to make a copy, and it's time to fill it out. Ask me if you have any questions. There's two pieces of paperwork you need: a real estate purchase contract, and then you need a seller finance addendum. This agreement is between Noel— man, I got too many tabs open, man, this is crazy talk— Noel Nguyen, okay, and my LLC is Ventures of Nathan Payne Enterprises. And what this is saying is this is referencing the agreement that you made where they signed the purchase agreement. So that hopefully she signs it today Let's see, 316. I'm going to call her after this and just walk her through it. I'll show you guys how to talk to a seller and walk her through an agreement. Sorry, Henry, what's up?

Uh, it's not that on, uh, 302.

Oh, thanks. I'm glad you got my back, dude. 21623. The buyer and seller, when mentioned together, may be referred to as parties. Seller agrees to sell to buyer the property known as, and then we put the address in there. Bada bing, bada boom. So you're just putting in the info, property terms, purchase price, $300,000. Remember, $300,000, that's what she wanted. Seller carryback, $300,000 because they are carrying the whole thing. We're not putting any money down. Payments. And guys, by the way, I'm not like the guru of seller finance. I know how to do it. And I know that if I mess something up, my title company or the agency that I'm going to work with will catch it. But I fill out as much as I need to. Seller carryback payments are going to be $14,000. What did we say, Henry? It was going to be $14,032. Is that right?

Yeah, about that.

$14,032. That's right. $14,032. So it says payments, payments of $14,032 flat fee not to be applied towards the principal of $700,000. So we actually are going to apply this towards the principal. Payments of $1,400. So this was a previous deal that I did, but I did not apply towards the principal. So I'm going to say this one is a little bit more confusing because I was just doing interest-only payments with this guy. Let me see if I have a different one that I can just compare. Okay, this one might be a little bit easier to use. Purchase price assumption of current note is $165,000. Let's see, down payment to be paid directly to Utah Home. Acquisitions. Upon acceptance, buyer will have 1 day acceptance date to deliver earnest money in the amount of $3,500. The amount will be paid to both sides to close. Buyer to be responsible for paying all taxes and utilities. So that's something we're going to have to— we're going to have to add in ours to pay the utilities because she's not going to be in charge of those. You want to write this stuff out so they feel comfortable, you know what I'm saying? Buyer to be responsible to So this is saying buyer to be responsible for all property taxes for 2022 and utilities. I would say buyer to be responsible for all property taxes and utilities after purchase, after close. Okay, so we're responsible for that. Let's see, late fee of— so this protects the seller. Late fee of $95 if payment is not received after the 3rd of each month. We can put that in there. I don't care. That's just saying we got to make the payments to her or the, the prop on the property on time, which is we got to do that. Let's see, prorate April payment begins May 3rd. We'll continue. This one's pretty specific. I think the seller was tripping out. We'll see how specific we have to get with this one. Owner policy and all title fees paid by buyer. Okay. We'll do that.

So on line number 3, it says toward the principal of only $70.

No, sorry. I was, I didn't finish making that one. Owner's policy and all title fees paid by buyer. Note due August 3rd. So this is saying when the note is due, right? The balloon payment. Buyer to pay $950 monthly amount directly to initial seller, aka Daniel E. So this is paying it directly to them. Greg Wilding, the buyer, will be responsible, blah, blah, blah. So this deal that I'm— this one I'm looking at that we did here was we stayed in the middle. We had a buyer we seller financed the deal and then we had a buyer pay us a fee and then we stayed in the middle. That's why this is a little funky, but let's go back to this. Okay, payments of $1,432 flat rate to be applied towards the principal. I'm not going to write that. I'm going to say 4% interest rate. There you go, 4% interest rate, payments of $1,432, late fee of $95, buyer will be responsible, owner's policy and titles, insurance will be Set to include the seller as a mortgagee. Payments begin the day after tenant vacates the property. Payments begin the day after tenants— yeah, that's what we'll do because there are tenants in there. No guarantees of rent payment from current tenant. Note due 6 months. So this is 2 years after close of escrow in a balloon payment, paying the remainder, remaining balance of So again, $300,000, 4%. So we go down here to, uh, 2 years, which is, uh, 24 months. So we would basically owe her at the end of— that's how much we would owe her at the end of 2 years. So she's making all this interest. So I know this doesn't sound like a ton, but look, this is how much she would make. I'm on the wrong tab, dang it. Okay, so 24 months, 24 pay periods. So by selling this house to us, she is going to get paid $288,750 after 2 years, right? Because it's gotten paid down. Note due 2 years after close of escrow and a balloon payment paying the remaining balance of $288,000. So that's what she gets. And just so you know, like, she's going to make this much in interest over the 2 years.

Okay.

So there's that. Dude, what is going on with this formula? Let's go, come on. So maybe I go SUM. I want this 24 periods. Okay, there you go. So she's making in interest over the next 2 years, $23,592, right? And plus when we purchase the property out, so you add this together. So instead of selling the house for $300,000 and getting that, In 2 years, she's getting an additional— she would basically over 2 years make an extra $23,000 on the sale of her home, $23,592, because she's selling it on terms and she's getting interest payments, right? So that enables her to get her price that she wants plus more money by waiting 2 years. Any questions?

$23,592.

So all I did, Henry, is I took the interest over the 24 payments and I added them up. And that's how much she's making in interest over those since she's financing the deal. It's like what a bank would make.

All right. So, so she make $23,000 over 2 years?

Yeah, over 2 years in interest. And then if you add, if you add it together, she's really making $323,592 instead of selling it to me for $300,000. She's making extra money by financing me.

Oh, so, so this, this looks better compared with when she goes selling with the realtor. Yeah. She's making more.

Yeah. She makes way more money, but she just has to wait. She's— that's the only thing. So if you wait, you get paid more. A lot of people don't want to wait. They'd rather just take the money and put it somewhere else. But yeah, maybe she's not in that situation. So anyway, I have a question. Sorry. How—

I know that's benefit for the seller, but how does that benefit you guys if you're paying more?

So how that benefits us is we are buying a property with no money down and we're able to rent it out for what, let's say, $2,000. So for an investment of our money, no money, right? Maybe some closing costs. We're making $568 a month, right? Times 24 payment periods. So we're making $13,626 a month minus expenses. Like if there's anything we got to take care of, right? On like a little investment, right? Does that make sense? Like there's actually like no investment other than the closing costs and maybe some things we have to put up. Plus when we sell the house, we're thinking that in the 24 payment periods when we sell it, we're going to have to owe her $288,750, correct? Uh-huh. But we believe in 2 years that this house is probably going to be worth maybe $350,000, right? It's because it will appreciate. So this house versus it not being a deal at all because we can't afford to pay what she wants on a wholesale deal, we make in 5 years potentially $13,000 in payments on investment with $0. Plus when we sell it for $350,000, we pay her off and we make the difference of $60,000 in 2 years. Got it. So you're going to—

your goal is to basically sell it before the balloon payment is up or refinance out of it and keep it, but make the difference.

You can do a cash-out refi and refinance out in, you know, make some money if it appraises for more.

Okay.

Thank you. Does that make sense? That's why a lot of people do this is because they're like, okay, if my balloon payments in 5, 10, 15 years, I can refinance or sell the house when it appreciates. So that's— let me explain. I did this in Utah, so I bought the guy's house from him. Nobody was willing to pay him $145,000 for it, like cash. So I said, look, dude, I can pay you $145,000 for your house, but I can do it in 5 years. Okay, I can balloon you out in 5 years, but I'll just take over the payments until then. Right. So things got a little squirrely and he wanted to get paid out sooner and it already appreciated. So I— the house got appraised for $220,000, right, when I got it and I was able to cash out refinance and get like $180,000 for it. I think that was the number. So if I had to pay him out $145,000 and I got $180,000, I was able to get that cash back out of it, right, between $180,000 and $145,000. Actually wasn't that much, but does that make sense? Mm-hmm. Yes. So that's why people do it because they bank on appreciation. So, and cash flow on an investment that didn't cost you any money. So that's why— do you see how this is such a powerful deal? In 2 years we could make— even if you only made $20K in 2 years, it's a little investment you make to cash flow and to make, you know, let's just say $30,000 on something you were going to make $0 on. Yeah. Now maybe I'm jumping ahead, but who goes on title. So we would— so we're buying it subject to, so we're technically purchasing the property. She's just holding the loan in place because it's— she has a mortgage on it. So we're, we're buying it subject to. And by the way, again, I'm not the professional to learn from. I just know how to make the offer. And, uh, I would just say to everyone, like, hey, I'm not the seller finance expert. And that's probably a good thing for everyone that's watching. It's like, you don't need to be the expert to do seller finance deals. You just need a team behind you that can make sure you're doing it the right way. That's why I take this I send them, I fill it out, and I send it to my title company. I say, hey, is this all legit? Did I set it up right? Like, I ask them every time and they're like, you're good. So I think it's a powerful place, or it's good to admit that, like, I'm not perfect and I don't expect to be perfect, you know, because I want people to have my back in case I make a mistake. You know what I'm saying? Yeah. So, and then you are trusting her to pay her mortgage? No, so I'm not giving her the money. We would hire a company that would make the payments for, for me. So I can't remember what it's called, but there's, there's companies that you, you give the money to and they pay the mortgage payment and they pay her out the difference. Because if you just give her the money, she could just pocket it and just run. So we're going to put a place— I can't remember, I'm blanking, but it's one of these like escrow companies that pay and they take care of all the payments and they actually document. That's the best way you want to do it. I think it's a loan servicing. Can't remember, but I could find out because I have a slide on it. But does that make sense? Yeah. Okay. So the note is due in 2 years. Seller to pay homeowners for the term. So yeah, the seller keeps the homeowner's insurance in place. Buyer to notify the seller when the current tenant vacates. Yeah, we want that too, because there's, there's tenants here. Servicing company. Thank you, Alonzo. Yeah. Servicing company is what you would use to make the payment. Does that make sense?

I have a question.

Go ahead, brother.

So is she include—

let's know what the question again.

Does, does he require any down payment to her or she doesn't want any down payment?

I said I wasn't going to make her a down payment and she said that was fine if I gave her asking price.

So, oh, so no, no down payment required.

All right. Yeah. And sometimes like most people that do seller finance don't want to put any money down or little money down because 'Cause the thing is, if you put money down, it kind of sometimes ruins the math on the deal and not making a good investment. 'Cause if you got to put money down, you might as well just get a traditional mortgage, right? But it depends how much money they want down. Like sometimes sellers want like $100K down. So we're saying right here, purchase price, $300,000, seller carryback. She's carrying this back. Let's see, payments $1,432. Alonzo says they send her the payment, the money that you pay in payments.

Yes.

All right. Late fee buyer to be responsible for all property taxes, utilities after close of escrow. Cool. Owner's policy and all title fees paid by buyer. Insurance will be set up to include the seller as a mortgagee. You probably— nobody probably knows what that means, but it needs to be put in there. Payments begin the day after tenants vacate property. We want— I don't want to pay if the tenants are there. Note due 2 years after close of escrow and a balloon payment paying the remaining balance of $287. Okay. Because what it is, that's what it breaks down to. Seller to pay homeowner insurance for the term. Buyer to notify the seller when the current tenant vacates. Okay, that's it. We send this over to her. That's what this is. This is what it looks like. Now, if you sent this over and got it signed and you sent it to a title company, they would know exactly what to do. Anything that we missed, they could— they would figure out, right? They're not going to close. A title company is not going to close a deal unless it's all tip-top in shape, right? So this isn't the only thing you need. You actually need a purchase agreement. So let me show you guys how to fill that out. But before I move on, is there anything, any questions, Henry?

Uh, yes. So, uh, where can I find this contract? Is that in the mind map?

It is in the mind map. You dang right, brother. So if you go right here, because you're a part of the club and part of the mentorship, if you go to step number 6 on negotiating and making offers, if you go to contracts, you have every contract you'll ever need. Creative financing, lease options. It gives you every free contract for— there's a lot of different ways to fill out contracts, but I like doing the addendum because that's how I learned. But yeah, you get it all in here, brother.

All right, great.

Yeah. Okay, so we have this and now it's time to download this and send it over to her for her to sign. I'm going to call her because I don't want to just send it and hopefully she signs. I want to send it and go through it with her and see if she has any questions. So we'll see. So we're going to go, we're going to go to the DocuHub. What is it, PandaDoc? Alright, man, have you ever filled out a contract? Let's get it done. Alright, so we're going to go new document, blah. Okay, so this is my main real estate purchase contract. It's battle-tested, battle-approved. Here we go. So I am the buyer and she is the seller. Okay, Noelle. Alright, continue. Alright, so here's the date. We need the property address. And there's a lot of different CRMs that like you can put your contracts in and it will like automatically fill it out. But okay, so the deal purchase So the purchase price is $300,000, right? But what we do is we say, 'See addendum for terms,' right? And then that's how they know that this is— we're purchasing on terms, seller finance terms, right? So acceptance, I usually don't give them a due deal acceptance period because I don't care if they sign it, they do, or they don't. Earnest money, I usually put like $100 down, and if they say anything, I'll just say, 'Look, like, we're either going to buy it or not.' I can put more money down. I just usually do $100. Close date, let's do on or before 3/31 because I think that's the time they get out of there, the current tenant. So, but maybe we can close sooner. I'm just— it's on or before. Okay. And then we put the information. Okay, we're going to delete that. We're going to delete that. Okay, so this is buyer. This is me. This is her. Shoot, this contract says Utah Home Acquisitions. That's the wrong LLC. Whatever. It doesn't matter. I can still buy it in the LLC. I can change it. I can just wholesale it to myself and change the LLC. Or maybe I can just cross it out. So I'm going to, I'm actually just going to change it right now. It's not look good, does it? I don't care. I'm going to go here, put that in there. Copy that son of a gun. Does this seem hard, Henry, or you feel like this is something you could do?

Yeah, I think I could fill out a contract.

Yeah, man, you got this, bro. 100%.

Okay.

So I'm going to put My LLC Ventures. Of Nathan Payne. Enter. Such a terrible LLC name. I made it when I was like 20.

Yeah, that's a long name for LLC.

It's horrible, man. I know, it's terrible.

So, okay, can you able to, to change the LLC name? It stuck with you forever?

I think it's stuck with you forever, dude, to be honest. I know, I'm stuck, dude. I made a terrible LLC name. And I'm stuck. It's all good though. I don't think people read LLC names and think anything of it. I've never been like, oh wow, that's a great LLC name. Okay, so it says this contract is made on blank between Noel seller whose property is blank and Ventures of Nathan Payne and/or assigns buyer. So that allows you to assign it. But I also say I'm going to sign it. Buyer may assign contract below. See addendum for seller finance. All right, that's it, Henry. What do you think, man? Looks good to me. Looks good to you. So we send this over to her and then I'm going to call her and read her, walk her through it. But this is only one portion of the contract. Yeah. So Alonzo, so I have a— I was doing business with my business partner and now I'm doing business by myself. So this is our LLC that we did together. So that's the difference. All right. So I'm going to send this. All right. We're going to send that. All right. So that's one we did. Now we need to do another one. But I can sign my part right here. Henry, you think she'll sign today?

I hope so. Yeah, see ya, see ya, see ya. Look like she doesn't got an agent anymore.

Well, it doesn't— it honestly doesn't even matter if she has an agent because this could be just done with us. Like, we wouldn't need to be involved. All right, so we're gonna go here, we're gonna go back. We have one more paper to fill out, so we gotta go. Now we have to send the addendum. Which is seller finance addendum right here. I'm never too worried about making a mistake on paperwork, Henry, because again, you can always just fix it. Not a big deal. You can catch it later. So I just want to let you know, don't ever really trip if you don't know exactly if you're filling it out right. Okay, here we go. All right, so we're going to put all the fields in there. We're going to put the date. This is the date that I sign. Seller, all right, so it's me and then I got my signature. Bada bing, bada boom. Let's make this a little smaller. Okay, then we go her, we go signature, we go date and then please print. Why not? Initials. I don't like that it says please print, I probably got to switch that out. How is she going to print on there? She can't write it. Text field, signature, initials, date, text field. Yeah, maybe. Maybe she just got to write it out. We'll go here, text field. Okay. All right, Henry, here it is. You ready? Let me read it one more time. So we're purchasing it for $300,000, seller carryback $300,000. I'm a little iffy on the seller carryback if that's the right way to say it, but we'll see. Okay, if it's not, it's all good. Like I said, I ain't the guru, but I know how to get it done. Payments of $1,432, 4% interest, late fee of $95, not received on the 3rd, buyer to be responsible for all property taxes and utilities after close of escrow, owner policy and all title fees paid by Buyer insurance will be set as a mortgagee. Payment begins the day after tenant vacates property. Note due 2 years after close. And a balloon payment paying the remaining balance of blah, blah, blah. Seller to pay homeowner's insurance for the term. Buyer to notify the seller when the current tenant vacates the property. What do you think, Henry? Ready to send this off?

Yep.

Let's get it done. All right. And in the CRM, because we are sending the offer, what do we do with the CRM? We got to update the stage. So right here, we're gonna go to the stage opportunities, offer was made. Oh, all right. I guess I already made the offer. This is already in that stage. So now I need to get it under contract. So I need to call her right now and see if I can get it done. You believe I can get it done live? Yep. Let's give her a call right now, Henry, because that's what we do. We call, we go over the contract. You don't— you just don't send a contract and just pray that they sign it because that's a waste of your time. You want to call and See if you can get it done. Sign it right there. Noel, how are you? I was wondering, do you have any questions for me about the agreement? I wanted to actually walk you through it to see if there was anything I could answer for you. Mm-hmm. Yeah, does that work? Yeah, so I would need to do an inspection. I didn't put like a due diligence deadline just because I try to get it done like really fast. What— when do they— when are they supposed to get out of the property? Did you say June? Okay. Okay, March 31st by noon, you're saying. Let me, uh, we can always change the close date a little further out if we need to. They're supposed to get out by noon. Do you think they'd have a problem if I went in there just for like an hour or so just to check it out before, uh, close? Yeah, yeah, I would, I would give them the exact date and time so they would know. Yeah, so it wouldn't be like just randomly, we wouldn't just show up. Yeah, no, I won't do that. I wouldn't do that. So let me do this. Let me just, let me on the contract, I'll change your name. I will, what else? I will push the date just a little back just in case there's any problems. But if we do an inspection, I want you just to check and just let them know, like, it will— maybe just say, hey, I'm going to send some people over for maintenance just so they don't really care what's going on. I don't think they would even care because they don't own it. But then we can go in there and look at it. And I wouldn't mind closing sooner and you can just forward me the payment because it if you want to get this done sooner, I mean, all I need to do is go check it out and that's— and then we can be ready to go. Okay. All right. So I'll just change that and I'll call you when it's ready. And then I— if you, uh, if you're good to sign, then we'll start the process immediately. I'll call you right back. Let me finish to fix it. Yeah. So there's just two documents. There's the real estate purchase contract and then there's the seller finance addendum that just explains how we're going to make the payments and all those terms. Okay, let me just double-check and make sure it came back on my side. And I'm going to go take a look at these other properties that you have. Are you open on the other properties that you have? Are you open to selling those on terms as well? Okay, so you said only one can be in installment payments. How come the other one can't? Is it a— okay, so you need to just sell that one and get that money out of it. Okay, which one are— which one is— are you able to do the installment sale with it? Okay, either one. Gotcha, either one, but you just need at least one to be able to sell first. What, what other investments are you trying to do, just so I know? Maybe I come across something that might work for you. Okay, so if I can find you through my network if I come across anything that's, uh, in Long Beach or Santa Ana or in California? You're interested in those? And, um, do— are you wanting single-family or multi-family? Okay. And I'm just curious because I'm an investor obviously like yourself, what made you want to leave Florida and go back to California since you, you were investing in Florida so much? Yeah, I get that. So you've had, you've had a— it's just kind of maybe it's a little bit of a stress since it's all the way out the other side of the country. Yeah, that makes sense. I get that. Well, I go to Florida a lot for my job, so I think it's a good, good trade-off. You, you give me terms and I'm able to pay what you want and yeah, we'll work out. And, and like I said, I'll look at the other ones. Are the other ones, before I look at them, are they listed? Are both of them listed on the market with an agent? So if I were to buy, if we're about to work together on terms and we don't— the agent doesn't need to be involved because we're just working together. But if, if I purchase it like traditionally, like through a mortgage or something like that, find traditional financing or even a cash, I think the agent is there's like obligated— they're obligated to get their commission and fee, but I don't think so if it's through like an installment. I'll look at it, but this one that we just signed on, that one was not listed currently, right? You took it off? Okay, I think we can get past the other one on the installment, and, and, but so I might be able to help you on the other one. But if you, if you can't sell both on installment, you probably might just have to wait. Okay, well, look at it. Thank you, Noel. I appreciate your time, and we'll be— I'll be reaching out to you when we're starting our due diligence, and I'll tell you what time, and you just let me know what works best for you to reach out to the tenants and let me know. Have a good one. Yeah, but wow, Henry, you did it, bro. You did it, buddy. Wait, did she sign it? Yeah, bro, she's already signed it right here. Look, PandaDoc document has been signed. We just, we just signed an agreement. Let's get it. Wow. How you feeling, buddy? Wow, she fast. This is amazing. This is great.