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May 25, 2017

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September 6, 2017

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Owner and Seller Financing Discussion

May 9, 2018





Hey everyone, it's Greg Saunders with Oak Alley Capital. And I am here inside of our new flip in Jerrell Texas. Now this is the first time that we're working in this area and it's a small suburb, nestled between Roundrock and Waco. So kind of middle of nowhere. But if you work in North Austin or Roundrock or Georgetown, these are very affordable housing and pretty nice at that. 

So what we were able to do on this house and one of the reasons I was able to pick it up, was originally the sellers and I were pretty far off on the purchase price and what I was willing to pay. So after doing some negotiations, I found out that the seller didn't have a mortgage that needed to be paid off immediately. And they were okay with me taking the responsibilities and making the payments on their behalf for the next 12 months. So those of you who have been following or are familiar with this style of financing. It is seller financing. 

Now seller financing and owner financing are very different. They are used interchangeably, but the reason why I'm bringing up this video is seller financing is when the seller of the property is letting you take over any leans that might currently be in place. So in this case, there is an underlying mortgage still in the original sellers name, that I am now responsible for making payments on. Now if there was no underlying lean and the owner of the property, not just the seller, but the person who owned the property outright. If they wanted to provided the financing, well that's owner financing. So those are a little bit different and as always consult a CPA and an attorney if you are considering doing something like owner or seller financing. 

Now the reason why this is so powerful is rather than me having to go to a hard money lender or taking cash out of my account or going to a Bank of America or Chase, whatever traditional financing. We were able to close in 10 days. We'll be able to get our guys in, which you can already see. We've done some demo in here. This is day one. So we've taken out the flooring, taken out the carpet, that kind of stuff. But we should be from signing the original contract to closing, including construction and marketing in about 90 to 120 days, three to four months. 

Additionally, we don't have any lender fees. So with my hard money lender, they might charge two and a quarter points. A traditional lender might be one and a half points. I was able to go from what my bottom line was with those hard money lenders. Actually increase my purchase price, take a little bit of savings but rolling most of that into the seller and what they were looking for. And that was what actually got the deal done, was me saying okay, if I can take the money that I would have paid to lenders and apply to you and buying your equity. Will that work? And that few thousand dollar difference is exactly what needed to happen on the deal. 

So as always, if you guys have questions about the type of financing that we're doing, how we're finding our properties, or if you're interested in partnering. Feel free to reach out to admin@oaklacapitial.com. Reach out through the website or reach out to me on Facebook as well. All right guys, talk to you soon. 


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