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
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
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
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
