Monday, March 31, 2014

Where Do You Find Sellers That will Hold Owner Financing?

     They are everywhere.  They are everywhere.  I like to use this analogy.  When I was younger, I used to scuba dive.  Frequently, I would go out with three buddies.  I would come back from a dive with two or three big conch sea shells.  My friends would not find any.  This was not because  the conchs were not there.  It was because my friends did not know what conchs look like underwater.  They don't look like conch shell.  They look like two or three little dots sticking up out of the sand.

     If you are looking for an owner  to hold a mortgage for you, you have to know what they look like.  They don't look like a seller wearing a T shirt that says "I will hold owner financing". 

     They look like people that have a little grey hair.  They own their house free and clear.  They have a few shekels in the bank.  They look like heirs.  They inherited the property.  They look like builders and investors that are making a profit and would just as readily take that profit in the form of a mortgage.

     Cash is simple.  It requires no explanation.  If you want someone to hold a mortgage for you, you need to learn how to explain to them why they should hold a mortgage.  Anyone can understand cash.  Learn to explain the advantages of owner financing to  the person you want to hold a mortgage for you.

     Let's try this example.  You have found a $100,000 house that is free and clear.  It belong to three heirs.  It looks like 1980.  They inherited it.  They have no investment in it.  As you talk with them, as you chit chat with them, you learn what they intend to do with the money.  One is going to pay off some bills.  One is going to buy an RV.  The third one is going to put the money in the bank with her other $500,000.

     If you make an offer on their house with a ten thousand down payment and ask them to hold a ninety thousand dollar mortgage at six per cent interest with payments of six hundred per month, each heir gets one third of the payment.  You could even agree to make three equal payments.  The first heir can use her share of the payment to pay bills.  The second can subsidize an RV payment.  The third can not find a better way to invest her money at six per cent.

     You have to ask people,"Will you hold a mortgage?"  Frequently, they have never heard of this.  Learn to explain why this is good for the seller.  I believe this is very good for the seller.  Elderly people that own their property free and clear are so much better off holding a mortgage than getting cash.  Income is often better than cash.  They don't need to leave cash to their heirs.  They need to leave an annuity to their heirs.  This is super true if their heirs are irresponsible.

     Learn to visit with people that you are trying to buy from.  Learn to chit chat.  Learn to shoot the breeze.  By that I mean you need to learn to talk to people and ask them questions.  You need to learn about people.  People love to talk.  They will tell you their life story if you will just shut up and give them a chance.  Learn what they want.  Figure out how holding a mortgage for you will accomplish their goals.  Find out where they are moving.  Find out when they want to move.  Find out their financial condition.  This is not hard to do if you ask lots of question and listen, listen, listen. 

     As you talk and chat with the sellers, get them to like you.  The most important reason the seller will hold a mortgage for you is because they like you.  Be sure they like you.

     Most people don't hold a mortgage because no one asks them to.  Ask them. Asking questions is the best way to learn.   Make that you second question.  "What is the price?"  " Will you hold a mortgage?"  "How much does an RV cost?"  Chit chat.  Learn to do this if you do not already know how.  "  If we owned an RV , could we trade?"

     Learn to chit chat with questions.  Learn about the sellers.  Don't tell them your life story.  Listen to theirs.  When buying or selling, ask questions and listen, listen, listen.  They will tell you how to convince them to hold a mortgage for you if you will just listen.  People love to talk.  They will tell you their real motivation if you will just ask and listen.

     If holding a mortgage for you will solve their problem, make them an offer.

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