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Sometimes, you solve the seller’s problem
by agreeing on a small down payment and monthly payments to buy
their house. A lot of times I can arrange this owner-financed
purchase at zero interest! Next, you simply turn around and
create the same type of no-qualifying financing for your buyer
with payments that go directly from the buyer to you with no bank
in the middle.
You become the bank, by collecting a monthly
payment from your buyer and paying your seller each month,
keeping the difference. Believe me, there are millions of people
who can afford to buy a house but can't get qualified because of
the red tape rules and most banks. So when you ask for a modest
down payment and monthly payments, your buyer is only too happy
to buy the house from you it's the only way they can buy!
Buying And Selling A House
Using
Owner-Financing Creates At Least
Three Distinct Profit Centers For You:
1) Your first profit center is the
difference between the down payment you paid the seller, if any,
and what you collect from your buyers as their down payment. This
can be anywhere from $500 to $30,000 net profit you collect
within days of finding the deal.
2) Your second profit center is the
monthly spread on your incoming loan payment from your buyer and
your outgoing payment to your seller. This can run from $100 to
$1000 per house each month. This is money coming in whether you
are working or not, sick or well, at home or on vacation even if
you're dead and buried!
3) Your third profit center is the
difference between your purchase price and your sales price,
which can be from $5,000 to $150,000 on each deal. These cash
paydays can come immediately, or later in the deal . . . But the
best part is, you have nothing more to do to get them.
You Get Paid Several Times
For Doing The Job Once!
Sometimes the deal can be even simpler than
creating new financing, when you find a house with an assumable
existing loan. In these transactions, the loan does not have to
be paid off when the property is sold. These assumable mortgages
can be taken over by anybody, regardless of credit, right from
the present owner. You've probably seen "no qualifying"
in house ads before ... well, it might surprise you to know that
some of these people still have a hard time selling their
property!
They may have too much equity (that they want
to get paid for), or they may owe slightly more on the house than
what it's worth in today's market, or any number of other
problems. So their nice, assumable loan sits, and their nice,
pretty house sits, and it's all there waiting for you to come by
with a solution to their dilemma. In lots of cases you can
actually buy high, like at full retail, and sell high, and still
make a strong profit . . . and do so with no credit, little or no
money or risk, no partners, and very little training. You see...
The Loan You Create
Is What Makes These Houses A Good Deal!
Just how many assumable mortgages are out
there? Well, every FHA loan before December 15, 1989 is fully
assumable, as is every VA loan before March 1, 1988. In addition
to these, many owner-financed loans are (or can still be)
structured to be assumable. There are literally millions of
properties out there that, because of these loans, can be taken
over with a signature. You make your profit by simply finding a
buyer who couldn't normally qualify for new financing . . . but
who has some money to put down on the house... and placing them
in a home within just a few days The difference between the money
you collect from your buyer as down payment and what you pay the
seller down, is your profit. It's simple, quick, easy, and very
profitable!
There Are Three Keys
To Successful
For-Sale-By-Owner Deals:
First, the house must be in good
condition.
Second, you must be able to get
into it with only a very small cash investment.
Third, the property must have an
assumable non-qualifying loan, or else an assumable loan that you
create.
We go into each of these in great detail in my
Cash-Flow System, telling you exactly how to assure that each one
of these factors is in place and your profit is guaranteed. Does
it work? I wouldn't be writing about it if didn't. Take a look at
some typical successful students.
For Phil Barnes, it took a little determination
to find the seller, but you' can see how it paid off:
"I recently bought and sold a home that
I saw For Sale By Owner'. The owner was a truck driver and hard
to find (is it any wonder he hadn't sold the house yet... you not
only had to want this one, you had to chase down the owner,
too!). The house was an assumable, non-qualifying loan with a
$27,600 balance. After putting $3,500 in repairs, I sold for
$47,900, making a net profit of $16,800."
You notice that Phil didn't have to go out and
get anybody's approval to make the deal except the seller. No
banks. No loan approval process. He just made the deal with the
seller and assumed the loan. And guess what? When he resold the
house, the buyer was able to just take over the same loan, all
over again. No qualifying. No qualifying.
Glen Staples, from Maryland, did the same thing
on a $150,000 property, only his profit was $25,112. Glen
"quick-turned" an assumable mortgage he created on the
property involved in his deal. No loan application, no credit
reports, no points and no long drawn-out closing times. Glen's
deal closed in a few days after finding the buyer. No hassle,
just a cash profit. Remember, the loan itself is what makes these
deals great deals.
I know this owner-financing area might seem
just a little complicated at this point, but believe me, once you
understand how to structure these deals, and have the right forms
and agreements available everything falls right into place. My
complete For-Sale-By-Owner Cash-Flow System takes you through
every step and every variation of this tremendous money maker.
By the way, if you're looking for a house for
your family to live in... DO NOT under any circumstances buy one
before you get my course! It will cost you thousands of dollars
more than necessary . . . that I can absolutely guarantee you!
You Do Not Have To Trot Down To
Your
Local Bank And Get A Loan To Buy Your
Home, Regardless Of What They Would
Like You To Believe
I'll show you several ways you can be in a
lovely home in an area of your choice, with payments you'll love
with little or no cash required, no banks and no credit: I don't
care if you have a negative net worth, lousy credit, and are
bankrupt.
In fact, let me tell you about Bobby Sessions,
my long-haired, guitar-banging, rock star son-in-law. He and my
daughter purchased a lovely 2500 square-foot
"For-Sale-By-Owner" home in a gorgeous area of
Jacksonville. Now, that's no big deal except for a few neat
little goodies they got with the deal:
 The seller financed the entire purchase price
with a very small down payment.
No one ever pulled their credit report or
attempted to qualify them for anything.
They bought the house for 70% of its market value.
They spent very little money on fix up costs and did
what little work the house needed in one weekend.
They have no personal liability on the debt. If,
for some reason, they can't make the payments, the most they
could lose would be the house, none of their personal assets.
They can sell anytime they like and let a new
buyer assume their loan. . . without the seller's approval. No
Banks! This will make it very easy to sell when they're
ready.
From the time they found the house to the time they
closed it was only three weeks.. and that was to give the
seller time to move.
The monthly payments are $100 per month less than
if the bank had financed the house.
They paid one fourth the closing costs they would
have paid if they'd used bank financing.
My friend, for your own good, don't even
consider buying your next home without letting me show you how to
do it... the right way. You can do the exact same thing, get all
the same benefits and live in the home of your dreams a lot
quicker than you think . . . regardless of your financial
condition.
I can show you how to do everything I've
described here even if you've filed bankruptcy or have just been
released from jail! It's just not important when you know the
secrets. Here are a few of the important things you can learn in
the "For-Sale-By-Owner" Cash-Flow System:
How to make the seller your partner, to create
nothing-down, high-profit, win/win/win killer deals.
How to make offers that will be accepted 80% of the
time. One of the things we focus on is the ability to construct
offers to profit you and satisfy the Seller’s needs.
How to get super low interest, even zero interest or
loans from sellers.
How you can live in a house three times the price you
can afford and pay no more than you're paying now.
How to make huge profits on nice houses even when you
pay almost full retail price.
How to structure the financing so you can pass the house
to your buyers without qualifying them for a loan.
How you can buy and sell a house for the same price
and still profit handsomely.
How to use land contracts and wrap-around mortgages to
buy and sell, and why they should be in every real estate
entrepreneur's tool box.
Why it's financial suicide to take title to a house in
your own name.
Why only fools personally guarantee notes to sellers.
How to avoid liability and risk FOREVER.
Here's one more profit center that can easily
make you $10,000 on the very first deal and the best part is
there are literally hundreds of them available in your city right
now.
Here's an example to help clarify this
opportunity. Suppose a seller calls you with a house, in
excellent condition, worth $100,000 with a non-assumable loan
balance of $92,000 and a payment of $800. He's just lost his job
and is two payments behind. The seller isn't too concerned about
his equity because he simply doesn't have any to speak of. He's
more concerned about a potential foreclosure ruining his credit.
If he lists the house with a real estate agent and pays a
commission, he'll have to continue making payments he can't
afford while it's on the market. When and if it sells, he'll be
lucky to break even.
Most sellers in this situation are simply
looking for a solution, any solution. If you can provide one,
you'll be a hero and make money on a deal not one out of a
thousand investors would even touch.
Solution number one: Get the seller out of his
payments and clear of the house by finding a buyer to take over
the loan. First, the seller deeds you the house for no money or
perhaps $500 "moving money". You agree to make up back
payments when and if you find a buyer to take over his loan. I
always get the seller to sign a CYA (cover your assets) letter to
make sure he understands I made no promise to do anything except
try to solve his problem. Of course, the actual letter I use is
included in my FSBO Cash-Flow System.
Don't forget, this seller is about to be
foreclosed by the bank, so he has nothing to lose by selling his
house to you. Either you provide a solution or he loses the house
anyway.
Remember, the house has a $92,000 non-assumable
loan which most people would think is a problem and would prevent
a sale. This simply isn’t true! and those who
believe this conventional wisdom are walking past a fortune as
the listen to so-called experts!
Anytime a homeowner want to deed you their
house there is absolutely nothing to prevent them from doing so.
The loan is only a lien against the house. It does not have to be
assumed to transfer the title. Of course, the $92,000 loan is
still attached to the house, but you now own the home. You are
not liable for the debt unless you assume the loan, which would
be foolish and would screw up a perfectly simple, risk-free deal.
Your Objective Is Very
Simple:
Take the deed you've obtained for
little or no money, and pass it on to a new owner/occupant for
several thousand dollars. The seller deeds to you. You deed to
your buyer. The buyer starts making payments on the loan and owns
a house without having to qualify. The whole transaction
shouldn't take more than ten days to complete. At least none of
the 50 or so I've done took any longer than that!
To recap the deal:
We pay the seller $500 and obtain the deed.
We find a buyer to take over the $92,000 loan (without
qualifying).
Buyer pays us the $8,000 difference between the loan
balance and our price of $100,000.
We take care of two back payments ($1,600).
Our profit, minus back payments and the $500 we gave the
seller = $5,900.
Note: I usually pass all closing costs to
the buyer in these no-qualifying deals.
In the above example, the $92,000 loan
contained a "due-on-sale" clause. This wording, in a
mortgage, gives lenders the right to call the loan due in full
when ownership is transferred without the lender's permission.
The good news is, even though they have that right, it is rare
for a bank to force a conforming asset into a nonconforming asset
and refuse payments the buyer is ready, willing and able to make.
Why Is This So-Called
"Lethal" Clause Your Friend?
The perception of most people is that if the
bank has a right to call the loan due it will do so. That very
perception keeps unschooled investors away from these deals and
creates an enormous opportunity for those who understand how to
make them work.
Nothing is hidden. I teach students to make
sure all parties in the transaction are aware and accept the
minimal risk involved. I will teach you not only how to use the
due-on-sale clause to make a lot of money, but also how to insure
you’re never at risk.
Could You Buy A Home This
Way?
Of course! We've just discussed how to buy with
little or no money, no credit, and no personal liability.
Meanwhile you're getting free equity from a seller whose main
concern is getting rid of a problem. You will be absolutely
amazed at how many people would love to
just give you their house and walk away if you
give them the opportunity.
Of course there are a few things you'll need to
know and a few forms you'll need to use, and I've included
everything in my System.
Everyone who has bought a house in the last
five years with a small down payment and gotten 90% to 97%
financing is a candidate for this type of deal! They have very
little equity and a real problem when it comes time to sell.
My friend, I've got students who specialize in
these deals and make a killing. The deals are easy to do, very
plentiful, and require no credit and little or no money. The best
part is the houses are very easy to sell because you make it so
simple for a buyer who can't qualify anywhere else.
If you are wondering about these non-assumable
loans, forget it. You can make all non-assumable loans assumable!
No bank will control your income or tell you what to do. It's all
legal and moral and you'll be providing a service to your sellers
and buyers that will make you look like a hero. In fact,
you’ll even be helping out banks by saving sellers from
foreclosure. Everyone wins. No one loses.
You may remember I mentioned two solutions. In
our example, the seller may not want to deed you the property, in
which case you'll switch to the Lease/Option mode which we'll
cover in the next section.
Whatever problem the seller has, I'll train
you to become a "transaction engineer", and provide
solutions that are always win-win.
There are a lot more details than I can go into
here, details about which I’ve written and taught
extensively. Once you get into this System, you’ll be able
to go out and find beautiful homes located in great
neighborhoods, houses that the owners are having problems
selling, and solve their problem! It’s a terrific feeling to
make somebody happy while you’re making several paydays and
putting thousands into the bank. But there’s another
advantage...
This is a business that works everywhere, and
it's especially great where you have a bumper crop of those
mid-to high-priced beauties just aching to be bought.
For-Sale-By-Owner homes are all around you right now, and you can
find plenty more wherever you go just waiting for someone with
the right combination . . . the matchmaker with the way to solve
their problem. I get goose bumps just thinking about the fat
checks that are waiting for you when you master the
owner-financing secrets I can teach you.
In the next section I'll cover yet another way
you can make money with real estate, Lease/Options and Options.
Sincerely,
Ron LeGrand
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