Seller financing lets you buy property directly from the owner instead of using a bank. You find an owner with a paid-off house, confirm they'll lend to you, then negotiate price, interest rate, and repayment term. You can do zero-down deals and start building a rental portfolio with minimal cash.
Let's say you wanna buy a house, but you don't have all the money to pay for the house all at once. Instead of going to the bank, go directly to the person selling the house and ask if they would lend you the money for the property. This is called seller financing. The person selling the house acts as the bank and they will give you a loan for the house's purchase price. You then will have to pay the seller back over time, usually with interest, just like you would a bank loan. The difference with working with a bank and having seller financing is that there's a lot less paperwork when you you do seller finance. With seller financing, it's gonna be simpler and faster because the buyer is dealing directly with the person selling the house. The biggest advantage of seller financing is that you get to negotiate with the seller on the terms of the loan rather than the bank. Sellers tend to be much more flexible on interest rates and giving you longer repayment times for to pay back the loan. Let me put it in 3 simple steps for you. Step number 1 is find a person who owns a property free and clear that wants to sell the property. Step number 2 is make sure they're open to seller financing. Step number 3, negotiate the purchase price, the interest rate, and the repayment term for the loan. Now we'll get a little bit more in depth. Step 1 is to find somebody who owns their property free and clear. When you're buying a house on seller finance, you need the person to own the house free and clear because it makes the whole process a whole lot simpler. You can do creative financing and seller financing strategies if somebody has a mortgage, but it's a lot easier if they don't already have one in place because they have all of the equity in their property to loan you for a seller finance deal. Step number 2 is to make sure they're open to seller financing. A lot of sellers, when they sell their house, they need all the money right up front. You need to find somebody who's willing to delay them getting all of their money in exchange for, one, a higher price, and two, to get residual, completely passive income. Step number 3 is to negotiate with them on the purchase price, the interest rate, and the repayment term. These are all different levers that you can adjust to make the deal work. You can give somebody a higher purchase price if they give you a longer repayment term and a lower interest rate. Also, you could give somebody a lower purchase price if they want a higher interest rate and a lower repayment term. You need to learn how all of these different levers work and how they work together so you can structure the perfect deal that works for you and the seller. Guys, this is all the sauce you need to start doing seller finance deals. The beautiful thing about this is it's all negotiable. You can negotiate a 0% down, meaning you don't have to give them a down payment for a property and then pay it off over the next 30 years. You could then take that property out, rent it out, and you could start your real estate portfolio right now with little to no money to get started. Is what I want you to do is start taking action by talking to sellers, finding out who owns properties free and clear and who would be open to becoming the bank. [MUSIC] [MUSIC]
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