How to Negotiate For Owner Financing
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- Опубликовано: 21 авг 2019
- Here's How To Negotiate For Owner Financing like a PRO! Never Use Bank financing and Hard Money Lenders EVER again! #ownerfinancing If you're wondering how the top 1% real estate investors get the sellers/owners to say "Yes" to Owner Financing/Seller Financing, we're going to expose the secrets to you guys! How to Negotiate For Owner Financing... Enjoy!
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My brother and I went from having 0 rental properties to having 75 rental units in just ONE year... The secret? Owner Financing... AKA Seller Financing
As a buyer, owner financing is a concept where you make monthly payments to the seller in exchange for the ownership right of the property depending on the specifics of the arrangement. This is all in how you negotiate for owner financing. Here are the benefits of owner financing:
1. No need to use your credit!
2. No need to go through a rigorous underwriting process through a bank!
3. No more waiting MONTHS for your property to close
4. Most Owner Financing won't be reported on your credit thus it won't affect your Debt To Income Ratio
5. In a worst-case scenario, if you default in owner financing, it won't create a negative impact on your credit!
6. Choose your terms by negotiating the interest rates, down payment, and the amortization period.
Now... The WORST way to negotiate for owner financing is to directly ask for owner financing... You have to create LEVERAGE for the seller to WANT to sell it on owner financing. There are two groups of people to keep in mind when negotiating for owner financing:
1. The Young Real Estate Investor Seeking to build Cashflow.
2. The Older Real Estate Investor Seeking to retire, buy back time, and stability.
Depending on the group of people you're dealing with, you're going to employ a different type of negotiation strategy. The KEY is to address the seller's #1 challenge and priority when negotiating for the owner financing arrangement.
If you're ever wondering what questions to ask for owner financing, we have a FREE Course to teach you exactly what to say to a seller!
📋 SIGN UP FOR OUR FREE OWNER FINANCING COURSE:
freeownerfinancingcourse.com
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The Kwak Brothers are millennial real estate investors who have acquired over 82 Units of Rental Units and have raised over $20,000,000 of capital for their real estate deals. They are based out of the Chicago-land area and they are dedicated to helping hard-working people become financially free real estate investor! They specialize in owner financing acquisition and raising capital. They are the creator of the FORCE Strategy (Find the deal, Owner Finance It, Raise the Capital, Cashflow It, and Expand your Financial Freedom)
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--DISCLAIMER-- The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.
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Be sure to sign up for your FREE access to our Owner Financing Course: freeownerfinancingcourse.com
The Kwak Brothers hey I have a question can some one buy a home for me and then do the home finance for me? Or the house needs to be pay off first for the person to do a owner finance for me?
@@clipperxpo yes you can have someone buy a property and then sell it right back to you on owner financing.
How do you get the seller's audience profile from the start though?
Ah, yes... the "prep" part. I'm just not sure how to even get to the point of negotiations. For example, if I find a property on MLS... do I contact their realtor? ...do I find out who the owner is through my lawyer and contact them directly? do i ask MY realtor to reach out?
What 70 year old is going to agree to a 30 year loan?? The owner would be in a grave by then..
Just the info I was looking for. Subscribed!
Good teacher 😀❤️ You made me look at it a different way ..... Thank You😊
The amount of value in this vid is on another level
Just received my book in the mail!!
This information was amazing and gave me confidence to get started in the business
Awesome content! I was opposed to owner financing before watching this podcast. Now I see the bigger picture. Thank you!
Awesome! I'm glad you came around :)
Thank you very much! Love the content and obvious desire to help others!
Thank you for this! This was great.
Excellent video - clear n simple👍👍👍
I signed up and saw your free course on owner finance and it is amazing!!! It was the best breakdown on owner financing I ever seen on RUclips. I saw this video at the perfect time because I’m going to present this to someone I know who wants to sell a eight unit building with a storefront in Brooklyn. I want to learn more please help.
A great way is to have property secured for both sides is using land trust, check us out we use a 22 template doc.
Yes, this is it!! Putting my first Seller Financing deal together, and needed some clarity on the structuring piece, this video helped. Just signed up for the free course. Thanks
Glad it was helpful!
Darian, hope your deal went well, do you know about land trust, and transferring ownership?
great info, thank you.
Great video. Thanks!!
Great videos. 👍 very well done production too
Thank you!!!
This would have been so much better with actual numbers. I would love to see a redo with hypothetical deals.
Also, stupid question: how do you make money with seller financing if you're paying the seller and the mortgage?
Thank you for all the work you do and great content you give us.
pretty much treat the seller as the bank. you make more money on cashflow typically due to a lower int rate. banks will give even an expert like me 4.5%. on owner financing all my apartments i got 4%
Amazing video! Thank you!
Thank YOU!! :)
such a great video !!!
Great Video,Thanks
Really good content!
I love you every bit of it . But where do you find this deals ?
This a great video. Do you negotiate deals for people that want to purchase through owner finance for a percentage of the deal?
Hey brother I like your video
Hey! are you guys still offering free access to your Owner Financing Course? I fill out the form...but, nothing happen, no confirmation that the form went through.
If seller has an agent, can we still go with seller financing? How does it work? Thank you.
Yes. If your agent is well-versed, he will help set up the contract that stipulate how the payment plan will work.
Risky. Different state laws allow the Lender (seller) to repossess the house for very little reason, like one late payment. The buyer will loose all the equity and improvedments put in the house. Foreclosure law protections to buyer do not apply. BEWARE.
Or what happen is a seller has 2-3 year term so in the next 2-3 years he finances us and then We go to bank?? And what happens if the bank won't finance the home? Does that get covered in the inspections?
Great concept. How do you deal with prepayment? Satisfying the loan before the loan term is actualized. Example. Owner agrees 10-year term. But buyer pays off loan completely in 5 years. Are there prepayment penalties built into the loan agreement?
There might be! It depends on how you structured the contract. In most cases, you're doing a huge disservice if you pay the contract off early since the seller is banking on the interest that they're collecting.
Depending on how you negotiate and write the contract. My most recent deal there was no penalty written in and we agreed to pay through an escrow company to process the payments so they would also calculate the prepayment as necessary.
this depends on how the person looks tho.. like can the owner TRUST the buyer to come thru..
plus, what if the owner bails
If the mortgagee bails on the mortgagor, then they foreclose on the contract for deed, take back the property. Is that your question?
I keep watching this
What if suddenly the owner passed away , so what will happen while doing that monthly payment? Also, what will happen once you completed the total of 30 years payment?
Everything is falling into place my brother I tried investing knowing the truth! And tried to do it my way and not gods way ! I have never ever seen a single video from you but once you mention about your dad being a pastor I automatically subscribed ! Bc you have advice but even better someone greater is by your side! I’m here to stay ! And thank you for the video
You guys should get these on podcasts soon
Who draws up the contract once negotiations are made if the owner is the "bank." Does a lawyer?
This is a good start but doesn’t really dive into owner financing. It gives you a basic why but not all of it.
People would be willing for more reasons than just they’re retiring like they want to sell their house but have no equity or it would cost too much to sell open market. Or they need to sell for a private reason. The possible scenarios are endless.
End of day they video communicates you have to do that term but that’s wrong as well. You could be waaayy flexible.
“Hey mr seller how about I pay you half of the agreed amount and the other half once I flip it in a year?”
“Hey Mr seller how about we keep the mortgage in your name, I’ll give you 30k for the deed and take care of the monthly?” Then turn around find a buyer and do a wrap for a greater amount then the monthly and ask for 35k down. 5k goes to the nation pocket bank.
Hey mr seller because you need money immediately and your property been sitting on the market for 4 months because it’s middle nowhere Texas how about I give you 35k and I get my name onto the deed I get the rent and cut you a slice?
Patrick Pham bro can you make a RUclips channel ? Lol I live in Sacramento California and owner financing would be a great opportunity for me to explore, only that I don’t know much about it
It was a struggle taking notes from the way this was explained
How would you structure a deal with an owner who stills owe on the property or do they need to be completely paid off?
Land trust is a route to take, check us out
i'm confused and this didn't make any sense to me nor did it help me. I wish you had started with defining in detail what owner financing was
But why would a seller do this unless the market is down?
How could this be executed with little to no dp, do you get a hard money loan? Otherwise I’m lost to the incentive for the seller to benefit
This guy isn't doing a great job of explaining, but one of my friends told me the biggest advantage to the seller is you'll probably go in near or at asking. This is the main incentive for them. Especially if you eliminate the bank's appraiser, it's definitely a win because they know for sure that, since *they're* the bank, of course they're going to approve you for asking because that's what they want. As opposed to a property that say is asking 200k but only appraises at 160k. Most buyers in that price range are not going to have the cash to make up the difference between asking and what cash the bank will give them, unless the seller negotiates the price down. If you take into account down payment and also having to have extra cash on hand, most buyers in that price range will probably not have it. So going in at asking is a huge win for the seller and that's the biggest inventive for them to do seller financing. This really only works if the market isn't super hot though. If you're in an Austin or Portland or Seattle, sellers are most likely not going to want to do the financing themselves... Because there are probably going to be multiple offers, some cash, and some maybe even *above* asking. In my opinion It really just depends on the market, the price of the property and what kind of property it is. I'm looking at doing a seller finance on a home that's in a pretty rural area and it makes sense because it's a nice flip but unfortunately for the seller, the comps in the area are waaaaay under his asking.
@@TaylorMMontgomery Thank you for your response. I actually just wholesaled seller financing terms last month. It was really incentivizing for the seller because we met him at market value and gave him a 10 year balloon. Rural areas for this strategy sounds good, you’ll have to let me know how that goes!
@@DonGriffinJr the benefit is that you can offer more than what they are asking for in exchange for immediate ownership paying monthly installments.
I get that you are going to exaggerate a bit to convince the to sell, but there is no property owner that will take you seriously if you tell them that they are going to pay 350k in cap gains on a 1 mil sale + 50k closing costs. This example may have been rushed for the purpose of giving a rough scenario, but it is misleading on how you would effectively negotiate.
You're right, at first they don't believe half the time. But once I have them talk to their CPAs and advisors, almost every single time they come back more serious and open. Not rushed. Accurate. Just communicating what i've experienced in real life. Perhaps you have a different experience?
@@danielkwak4769 I don't understand how you can refer to taxes of $350k? Long term capital gains taxes are maxed out at 20% at the highest income bracket, which would equate to 200k of taxes. What am I missing here?
Cap gains are maxed at 25. dont forget the dep. recapt. which gets treated as ord. income. thats maxed at 37%
thts why i target older sellers
Can a Owner-Held-Mortgage be sold, like a mortgage company might sell a mortgage, to Wells Fargo?
Yes it can!
If I were to purchase a property w owner financing and i default on it, is it still called a foreclosure?
It would not be recorded on your credit, which is good. However you would loose your down payment and the property. So technically not a foreclosure, more a default on the terms, however it still would obviously not be ideal.
At the end of the day the day ends
I hope you realize you’re saying the same thing about 4-5 times. Please get straight to the point to build up and keep your audience’s interest.
They take too long to get to the point.