7 different Types of Owner Financing, tested Secrets' of real estate Investors
Welcome to MyRealEstate DOJO with Mr. Investor, gang, my name is mike, in today’s subject, I’m going to teach you about buying homes with no money and no credit by defining to you guys seven types of owner financing deals okay I hear a lot of people talking about owner financing like it’s just one idea and owner financing is like a species of animals and in this one species there’s many different types of animals, for example, in the cat species, there’s lions or tigers as leopards, so basically they are like financing, same species but different in form. There’s seven different types of owner financing and right now, I’m going to define that stuff for you so when you’re out there negotiating with a seller you can figure out what strategy or which species of owner financing fits for you and well the seller for you to be able to monetize and make some money.
So let’s go ahead and roll the curtains back, and get you action guys. Alright, the first type of owner financing, is what I love doing, it is called a “SUBJECT TO”. Now in this video I’m going to run through the seven types of ownner financing. Don’t have the time to sit here and define and break it down because already have videos that defines each of these ideas so if you don’t know what SUBJECT TO is refer back to my previous videos. But in a nutshell, SUBJECT TOs when a motivated seller sells you his property and the underlying mortgage or the underlying note stays in place and you're basically stepping in the seller shoes and making a monthly payments month after a month but you have to dealing your name or to get the title or do you want to show up the property in your name.
So the first type of owner financing ,which i personally like is called a “SUBJECT TO”, the second type of owner financing which I personally love is called a “wrap” and wrap is very similar to a subject, there’s a couple of major differences between them, watch my previous videos, but simply put in a wrap you’re buying property for motivated seller you get the title convey to your name do you underline mortgage stays in place adjust start making payments to the property these twos better sound very similar but its major differences between them please watch my videos but it simply put in a rap you create a new note you provide the seller with remedies etc.
Okay, let’s go to number three types of owner financing, this one’s called at lease with an option and I know you heard this a lot and basically what this is is two different types of an agreement one is an option this tells seller mr. seller I will buy your property so many months or so many years down the line and I’ll give you an auction money of x at the same time to take control the property the investor with told the seller may mgr. seller in going to rent out your property for your mortgage amount for X amount of years your X amount a month ok so again Don’t have the time to go into full details and break it down i have videos for each one of these different types of owner financing so just go ahead and dig into my video power.
Let’s go ahead and talk about the fourth type of owner financing, ok now the fourth one is called contract, it’s called contract for deed and basically what this means is that you find a motivated seller they sell you the property but they donative you the deed so the deed is holdings girl or by attorneys an attorney's office what you have is the contract that once you fulfil the deed is released to you a great example of thesis like whatever you buy a car you got dealership you buy it if you finance it you know you own the car but you don’t have the title you make monthly payments on it once that contract is finished at that time you will own the car.
So the fifth type is free and clear and simply what this means is that the seller, that’s selling your property does not even have an underlying mortgage, they own the house free and clear there’s no liens on the property, okay. So you could negotiate, ideal with a seller that owns house fully and clear now this is what everybody thinks about it when they think about owner financing, thinking about fleeing clear what they’re not really understanding is there’s so many different types of ways to buy property-owner financing even if there’s mortgage on the property, okay.
all right the sixth type of order financing is what I call the American dream, okay now what I mean by that is, if I find motivated seller and he doesn’t want to sell the property at a deep discount but has a significant amount of equity denied sell on the American dream, I tell them “hey why don’t you and I partner up in this transaction? You have the equity; have to catch the rehab the property, why don’t we partner up in this transaction? and once I have the property, once I marketed, once I sell it off, with the profits with you” so in nutshell I make the home seller part of the profit sharing pool what I mean by that is once you know instead of me putting all the money down than paying him he could keep the underlying note or if he has a houseful and clear I don’t have to pay him anything I just put the money into the property or rehab it or do whatever it needs to be done once I sell the property. Whatever you guys are able to negotiate which is a very powerful way well this is what I call the American dream, self-pitch to the seller if they don’t want to sell it to me at the very deep discount what have you i love this one.
Okay now number seven, the seventh way to owner financing a lot, we don’t think about this, is called home swapping, okay. What do I mean by that, is that you know, you may call and you might have an inventory they want and you can use that property as a down payment for the next property okay or vice versa they have what you want, to buy a property for them instead of giving them cash. Maybe you have a condo, if you have a piece of land, if you have another property; you say “Mr. Seller, why don’t we swap this evenly? over swap this as a down payment, or swap it as part of the principal reduction” whatever it is ok so now guys what I’m trying to tell you is in America, if you are driven, you have creative thought, a burning desire, you're willing to work, you know, if you're not willing to make excuses, You won’t appoint to think to yourself, you could become successful, you know, all it takes is hard work.
I just shown you seven ways to buy a home owner financing that does not require bank but does not require a credit check okay and you use these ways to structure deals. So go out there and make your dreams come true, no excuses, go out there, take action.
Again Please please subscribe or like or leave comment, it really motivates me to go out there and make more videos for you guys as I do this for free, i do this out of love I want to help you reach your goals, this is America you can do it, so please please subscribe, like, or share my videos, this is mike with my real estatedojo gang and I’ll talk to you later.