How Does Seller Financing Work For The Seller

Are you thinking of going into seller financing? Do you want to know how you can earn with it? In this video, I’ll show you how a typical deal works and how owner financing works for the seller.

How seller financing works for the seller.  this is coming from the point of view that   financing. i’m going to show you how it  so, in this video, i’m going to run  i’m not an artist but i’m going to do the  best i can over here. and i’m going to show   the road deal. it’s not a home run, it’s not   slim, it’s just an average

Deal. the reason i  know all this stuff is my name is mitch stephen,   houses series. and i’ve been buying and selling   houses for over 2 decades and i’ve been seller  financing about 65 to 75 percent of them over   my entire career. so, i may not know everything  in the world but i know a little bit about that.  

In a previous video, we had used a rent formula   $1500. we needed to know what we could sell   that rent formula that we could sell that   house for 165,000. so, based on a $1500 rent,  we established that we could sell the house for   $165,000. this is important because before you  can start to even remotely negotiate on

What   you want to buy a house for, you got to know what  you can sell it for. so, you might want to go back   and watch that video where i back into the rents  to establish the ofvv or the owner finance value.   so, here we are we can sell this house for 165.  i really like to buy houses in such a fashion   owed twice what i

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Have in it. so, let’s assume,   lot. since i can sell this house for 165,000,   for 82,500. there’s a lot of reasons why   people will sell their houses at this kind of  discount. we won’t go into that minutia now.   but as of right now in the conversation, i’ve got  the house under contract for 82.5 (thousand). now,  

I always borrow 2,000 over my acquisition cost  because it cost me about $2,000 to get myself   in a position to be able to talk to this person to  buy their house. so, i need to get my $2,000 back.   if i leave $2,000 worth of advertising money in  1,000 houses a year, that’s $200,000 i’ve left   laying around that year. if i do

It 5 years in a  row then i’ve left a million dollars laying around   in advertising. so, i like to not do that. i like  to get my advertising. so, i’m going to go ahead   and go to my private lender who by the way doesn’t  argue with me about borrowing this $2,000. your   cancel your loan application because of this.  

But my private lender is gonna loan me 84,500.  he’s going to loan that to me at 10% for 20 years   and my payment is going to be $910. that’s the  acquisition side. i now own the house and i’m   now making these payments to my private lender.  so now, we’re going to go to the sales side.   i’m going to sell this house for $165,000

And  i’m going to get 16,500 or 10% down. and i do   all the time. and s,o 165,000 minus 16,500 cash  down payment, that equals a 148,500 that i’m   going to carry for my buyer and i’m going to carry  this at 20% for 20 years. and their payment to me   is going to be $1,435. so, this is what i have  going out and this is

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What i have coming in.   i’ve cleared myself $525. how i like to look  at it is… and this is important to note,   how much of my money out of my pocket do i   have in this house? zero. i borrowed it all from a  private lender. not only did i borrow what it took   to buy it. i always also borrowed my advertising 

Expense. and it’s right there. so, when i collect   money. it goes in this pocket right here.   it’s what i pay my bills with. what i pay my car  payment, my house payment, my utility bills, what   i buy groceries with. okay? so, that’s my money  $16,500 to create a 525-dollar a month positive  cash flow. that’s going to go on

For 20 years.   times 20 years or 240 months it comes up  to $126,000 that’s what i’m owed in the   future. if you add this 16.5(thousand) plus the  126,000, it comes out to one 142.5(thousand).   i got kind of sloppy there. it comes out to the…  the total profit on this house… potential profit   82.5(thousand)

And borrowed 84.5(thousand)   heard in the past or you hear my podcast or   you hear me some places statements say that i’m  a multi, multi, multi, multi, multi-millionaire   is because every time i do one of these houses,  i’m making like 142 (thousand), 126 (thousand) of   it which is owed to me in the future in the

Form  of monthly payments. but i’ve done this thousands   of times in a row. there’s hundreds of people  that owe me these balances, you know? and if   they don’t pay me, then i’m going to collect their  house back and sell it to someone else. so, that’s   why this business is so lucrative. that’s why i’m  excited about this

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Business. and what i love most   about it is i don’t get calls for tenants and  toilets because i’m the bank. and that’s what i   want you to be is the bank. so, if you have fun  looking at this case study and these numbers,   there’s more to come. please hit the subscribe  button. and if you’ll do me a big favor and hit  

That like… and if there’s any love you things  there, just pound on that for a while, okay? but   at least the likes and the subscribes. thank you  very much. we’ll talk to you in the next episode.

Transcribed from video
How Does Seller Financing Work For The Seller By Mitch Stephen