There are so-called gurus out there that will tell you that you need to have good credit in order to get funding from the banks to buy properties. You may also be thinking that you need lots of money to start. Not so! You have so many options for financing your properties that you won’t believe how easy it is to operate without the bank. My favorite option?
Let the seller be the bank!
You can offer to buy the seller’s house “subject-to” their loan. Simply stated; you take over the existing financing where possible and avoid having to go to the bank to qualify for a new loan. Many times, especially if there is equity in the house, the seller will write you a check to simply take the property off their hands.
This saves you:
- Time
- Financing Costs
- Use of your credit
Here is an example from one of my students:
He got a lead from a woman that owned a beautiful house on a lake. She’d been trying to sell her property for over a year with no luck. She just wanted out of her house. My student met with her, ran through her numbers and showed her it would cost her $60,000 to sell. He then asked her if this was something she could handle and she said…YES. She was willing to pay him $60,000 just to take the house off her hands.
Is that a good deal?
Yeah Baby!
Now, this isn’t going to happen all the time but it can happen and you can make it happen. I have scripting available that will guide you through this process. Don’t worry if your negotiation skills aren’t top notch, the paperwork will guide you through the process. Once you get comfortable with these deals, what you’ll see is that you can easily find that again and again and again.
We had been doing a lot of stuff but we were doing it the wrong way and then things turned around.
The bottom line is that you want to be able to show the seller that you have a WORKABLE solution for them. Most of the time, it isn’t about the money. It’s about helping the seller get out of a situation they can no longer handle. They don’t care what it costs to get rid of the home, they just want out!
Now that we’ve touched on where to get the funding, the next article will focus on what kind of properties to look for.
Here’s to your success!
Lou Brown
The Street Smart Investor
