Who Holds Title In Seller Financing?

Are you wondering who holds the title in seller financing? It may be confusing at first, which is why I’m going to explain everything in this video! Keep watching to learn more about seller financing and how you can make money with it!

I’ve been involved in the alternative category of  real estate. now, what is that category? well it’s   but tax liens and tax deeds have  but most real estate schools and most brokers, they  don’t have time to learn about tax liens and tax   deeds but they’ve been around and they’ve been  sell sold to the public for over 200 years

And   there’s some great opportunities for people   like you. so i’m going to answer the question today  financing? so, i always recommend that clients not  only try to buy at these auctions and buy for 10   and 20 cents on the dollar, but if they bought it  low, i tell them why don’t you sell it low and when   you

Sell it low, if you can add a financial package  to it, in other words be the banker, you’ll sell it   even quicker? so, my first response when people  talk about who holds title in seller financing   is that this is an important subject. it’s very  important. so, the person that’s asking the question   in reducing risk. so,

If you’ll hold on to that   title like i’m going to suggest, well then you’ll  now before i get into the nitty-gritty of this,  say that, i don’t mean that it’s just this business  is risky, all business is risky. so whenever we can,   let’s try to reduce that and by reducing that, i’m  saying let’s not take major risk. for example

If   you could buy a property for 10 to 20 cents on the  dollar, well you’ve reduced your risk quite a bit.  so if you can then sell it for 50 or 60 cents on  the dollar, you’ve kept your risk low. it’s always   a good idea to try to avoid risk. so, you don’t  want to sell anything and not retain the title   if you’re

Going to be the banker. all right so  i read a quote from a very famous investor, his   in the stock market. well good for him. he made a  lot of money there and he continues to do that and   he had a couple of rules about investing. so rule  don’t lose money and of course, you would have  a rule number two and rule number two was

This.  read rule number one all over again. and so that  was his investment advice. well i’ll be right back   advices he has but i’m going to show you how   you can avoid risk with tax liens and tax deeds  as much as possible. i’ll be right back. okay well, who holds title in seller financing is the name of  this episode. so, i’m going

To try to give you the   meaning and say they understand all this and on  the way, i’ll tell you a lot more about tax liens   and tax deeds. all right so the simple answer is  if you’re going to provide seller financing, you’re   going to be the lender, you must hold the title. why?  because if you don’t hold the title and you

Allow   a mortgage to take place, the person that holds  the mortgage is going to have the title and you’re   going to have a problem. so, you don’t want to have  that problem. what you want to do is you want to   hold on to the title and that way, that renter,  that borrower, whatever you want to call them   is going to

Make sure they make payments. if they  don’t, you just simply evict them and they’ll lose   their money. so you’re going to do all this with  a written contract. now, you’re not going to have   a hearsay contract in real estate. all the states  require anything that happens in real estate has   to be in writing. it doesn’t matter

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Whether it’s  a broker, doesn’t matter it’s a buyer or seller,   so what we do is we use contracts for sale and   contracts for deeds and they not only outline the  principal payments, but they also outline you know   installment sales, how much they’re going to be,  they outline who owns the property and for how long.  

In other words all the details of the contract are  going to be written into the contract to make it   easy. all right now title companies can provide  you with those contracts so you don’t have to   spend a fortune to get one, you can go to a title  company because they’d like to have your business   documentation that you need

To buy or to sell   a property. so i’m very positive on using title  companies. i’m not negative on attorneys, it’s   probably have a lot more time involved. all right   so everything in real estate, whether you’re buying  or selling, is going to require a written contract. now most people hate to read those contracts.  are you

Making a big mistake? so the way you  eliminate risk is you’ll take your time and   you read that contract. what you don’t understand,  let the other people, the experts, explain it to   you. now, it’s devastating if you find out something  about the contract after it’s signed. you want to   find out before. for example what if

The people  don’t pay, what are you going to do? well if you   have kept the title, you can simply evict them, all  right, but if you haven’t kept the title, now you’re   going to have to go through a very costly mortgage  all right you just don’t know what you don’t  know. so, the title companies are there to help you, understand

The buying and selling rules are   going to be a little different in each state but  attorneys for that state and title companies   from the essence will know exactly what to do and  they’re happy to help you. why? because they want   your business, you’re gonna have to pay for it. now  remember when something goes wrong, you got

A mess   on your hands, a real mess and you don’t want to  go through that. so in a moment, i’m going to show   you- in this episode i’m going to show you who  holds the title and why and i can start in that   process by telling you once you’ve given up the  so you don’t want to give up control the property  until you have

All your money because you’re now   the seller and what if they don’t pay you? trying  to get your money when you have no collateral is   a big, big problem. all right now in my workshops,  i do three day workshops three or four times a   briefly explain the challenge that you have   when you’re in business. all right and i

Do that  by talking about the small business administration.   now who is that? well that’s an agency of the  united states government that actually lends   money to small business. but this federal agency  will give you a lot of information if you’ll ask.   now they explained to people look, business is  risky. all right,

If there’s risk, you need to try   to avoid that risk. so how are you going to do that?  so let’s talk about how much risk there really is   in a business. doesn’t matter what the business  now that small business, sba, they keep track of all  this and when they keep track, now you get a place   to find out. so according to the

Small business  administration, if a thousand businesses start and   it’s a lot more than that, it’s like six hundred  thousand a year in the united states, okay, if the   small business starts and there’s a thousand of  them, by the time five years go by, 80% of those   would fail. so think about what i just said. 80 of 

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The thousand is 800 failures. there’s only 200 left. now if you follow the 200 that are survivors for  the next five years, 80% of those are going to fail,   my point is you have a 96% chance that you’re going  to fail. how are you going to avoid that and what   caused it? we know what caused it is number one,  people don’t understand

Finance. number two, they   don’t understand marketing. number three, they don’t  understand the importance of sales. those are three   things that most entrepreneurs don’t know enough  about. well if you don’t know those, you better   start learning them on the way. who are you going  to learn them from? they’re people that

You don’t   want to talk to, right, and that means a coach  or a guide or a mentor and that small business   administration will tell you exactly that. you  need someone that’s going to help you. now you   don’t want to just take your advice from anybody.  you don’t want to take advice from anyone. you   only want

To take advice at least in my opinion  from people that are already successful and have   a lot of money in a high net worth, that would be  someone to listen to, especially if they’re going   to do something that relates to your business. all  right who else would you want to listen to? what   of experience and have done it

Again and again   if that’s the kind of businesses you know about.  all right so that usually is a coach, a mentor or   some kind of guide. all right so those two things  i’m not just selling my services, i’m telling you  what the small business administration has found   out after 50 years as a government agency. they 

Know that you only have a four percent chance of failing.   now you’re not going to hear that in late night  television but i’m here to tell you you got a   four percent chance of that business surviving  10 years. all right the ones that survived, there’s   always a reason. they understand marketing, they  understand sales, they

Understand a little bit   about finance. they understand ask questions of  professionals. all right, i call those professionals,   coach, guides, mentors, you need that someone to help  you. all right so let’s go back and think about   what the heck’s going on here. a lot of people  all right, i want to buy property that when i

Look at  it, i know i’m going to make money. what do i mean   by that? i want to know when i buy it that i made  money. now i’ve been in businesses that i bought   and i had to wait 10 years for the appreciation  to take place and the rents to go up whatever.   when i buy at a tax auction, i can look at the  property, figure

Out what my exit strategy is,   say i’m going to buy in on that one because i know  know i can make. now how am i going to do that?  discovered those 30 years ago, i never looked back.  why didn’t i never look? why not look back? folks, i could look and see if i can get that for 10 or 20  i’m going to make money. well, i like that decision 

Going in when i invest. i don’t want to make the   investment and then i have to wait and actually  pray, which is what most people do. most people   pray they’re going to make money well, i can assure  you prayer is not, is not a good business strategy   and if you don’t believe me, go back to what i  just said. small business

Administration tells us   96% failure. i’m sure those people didn’t go to bed  at night and not say their prayers. they said their   prayers, that’s for sure. all right so the united  states has tons of properties. okay, people don’t   pay the tax. if they don’t pay the tax, the state  legislature is going to do something. what

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Are they   going to do? they’re going to get a hold of the  board of supervisors or county commissioners in   that county and tell them levy the tax, collect  the tax. if you can’t collect the tax, seize the   property and sell it at a public auction and that  all right now the county commissioners have power.  they send the

Treasurer down there and the tax  it’s always conducted by the treasurer. the money  people know the money so that’s how you’re going   to learn. now what do you want to do? well you  want to go there and you want to buy for 10,   you got margins so you know ahead of time   exactly how much money you’re going to make. if 

You don’t know how much money, you’re going to be-   these are unwanted properties. they’re unwanted.  the people who win them didn’t pay the tax so they  don’t want them so the county is just going to get   rid of these properties selling for 10 cents, 20  cents, 30 cents on the dollar with no mortgage. the   treasurer wipes

Out the mortgage. all right so that  means you’re going to get them for pennies on the   dollar. sometime 60, 70, 80% discount. now folks,  let me just stop for a second. if you can get a   property with no mortgage at an 80% discount, can  you somehow figure out how to make money? well of   course you could. you figured out

Right her. all  right so we teach people buy it low, sell it low   and if you want to attract people and you want to  get it so quickly, bring your price down below the   competition, number one and number two, use seller  you want to make sure who holds the title and the  question that we’re answering today is who holds  

The title in seller financing, that’s got to be you.  folks, that’s got to be you that holds that title   because once you’ve transferred title, you’re going  to have trouble collecting your money. so you’ll   hold on to that. so, i have hundreds of people come  to my three-day workshops and we teach them that.  buyers there’s plenty

Of them, there’s plenty of  buyers if you’re 20 or 30 cents under the market   but there’s even more buyers for your property if  you’re willing to use installment sales. so, you’re   kind of getting the idea. so, we have multiple ways  to sell the properties. i won’t go into those now   but you’re getting the idea but i want to

Give  you two cautions before you even go to the auction. what you need to know. you need to know   that you have to have boots on the ground that you  looked at that property. why should you look at it? i don’t know if there was a windstorm, i don’t know  if there was a fire, i have no idea what took place   and you want to make sure

Whatever you buy, you’re  going to get so when you buy at an auction, you get   you need to know what your  selling strategy is going to be   before you buy. in other words what’s your exit?  now that’ll give you a maximum to bid so that  you’ll know you only bid up to a certain level   because you want margin for profit. so

You always  want the margin for profit. so my name is ted   gift for you. i’ll see you on the next video.

Transcribed from video
Who Holds Title In Seller Financing? By Ted Thomas