How can Owner Financing Create Cash Flow?

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Welcome to virtual coffee with don recover the note queen where we talk about owner financing and notes financial solutions one mom-and-pop to another it just sounds to me like i don’t know i’m just getting that when you when it gets to the point where your cousin leaves so let’s just go over maybe you can get sixty five cash after closing cost paying a realtor and

All that right and if they’re good man they’re worth their weight though there’s i really love there’s some that make me want to shoot myself mad but you know they really really can be an asset if you get the right once but you can’t believe like you said to get an mls you need you need them or yeah i mean it depends on the situation i have sold properties without

Him but there’s other times where i will not do anything without them depends on the property the location you know price only blah blah blah so but i’ve sold them with or without the lower price point properties like canvassed on zillow for sale by owner and do just fine but i’m in an industry like i’ve been a realtor or their broker you’ve been an ambassador for

A while i’m pretty comfortable you know with most things right so but anyway i would just say or maybe so let’s just pretend like that each stays the same two years from now you can get sixty five thousand cash or maybe you can get seventy thousand if you owner carry you take ten thousand down and now you’ve got a note so let’s just see if you did that what kind

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Of cash flow you you have that’s not fair like just you know well just lay okay let’s pretend like you’re cousins that’s for two years and your cousins moving out so let’s say you can add a little bit of a premium right maybe you can get seventy thousand and you want to take at least ten percent down and hopefully you know people can afford that otherwise don’t

Transfer title if some i can’t come up with a minimum of 10% down i just wouldn’t even think about it you there’s a reason why they percent down for a conventional mortgage right because there’s a statistically a lot less likelihood of default and financial loss on the part of the lender so let’s just let’s just say they can put 10 down which is 10,000 divided by

70,000 so that’s like a 14 percent of now painting that would be pretty respectable for an owner-occupant for someone who’s going to live there as their primary residence and of course you know you anything you should who’s listening should be advised just disclaimer you need to go to your state figure out what you know i think a dodd-frank is a you know being the

Grip of the dodd-frank is being loosened but still you should know what the regulations are regarding you know carrying paper originating mortgages most mom-and-pop people like yourself are exempt you’re not considered a loan originator but just anyone listening you do your own homework to figure out you know what what your state is requiring you to do if you’re

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Gonna be a lender or if you’re gonna carry if you did five of these in the same year it’s probably different than if you just did one your whole life right now let’s say you have a $60,000 or no and even if you did and i’m just going to just this looks so bad i don’t even know if anyone can see it so i’m not i’m gonna show you a bit less $60,000 no let’s say if

You even gave them just a super-nice 5% interest rate and you were just like the banks and you gave a month my 30 here you’re young enough you’re gonna live 30 years or you can think of someone who would you mind inheriting your note if you got if you kick off early right you don’t really need it so when i solve for that you know when i sold for that scenario if

You’re solving right now under carry and got 10,000 down which is very respectable 5% amortized over 30 years just like a bank like i said you can make up anything that would give you a payment of three hundred and twenty two dollars a month which is what you’re getting now but without any you know you don’t pay taxes insurance water sewer hoa or any maintenance

Issues that could ever come up and you’re still giving actually more cash flow then you’re netting in rent but pretty close to the same but you got ten thousand in your pocket upfront and you have no exposure to the downside except for the downside is if they default that’s why especially in new jersey new york florida those areas where it can take a long time to

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Foreclose i might say 20% or nothing you know so if you can’t find someone if you can find someone who can put 20% down because it can take so long to get through the court system right amit yeah so you got the risk of the default and then you have a risk of a total loss let’s say there’s some loss that the insurance company won’t cover you know i don’t know act

Of terror tsunami i don’t know you know mermaids attack manhattan i don’t know but you know if there’s anything that happens to the property that is not insurable that no one will insure then that that’s your other rivest you know if there’s some catastrophic thing earthquake flood or you know act of war you may you know okay well that person doesn’t have their

Home but then you still have the mortgage that’s not worth anything either except for land value possibly you know you’ve been listening to virtual coffee with don ricky bahl for more please visit note queen com

Transcribed from video
How can Owner Financing Create Cash Flow? By Dawn Rickabaugh