Did you read the title correctly? I said, “We are getting seller financing from banks!” Most of the nation is crying, whining and complaining about how hard it is get financing at banks. Perhaps they should be asking for a different type of financing from banks………SELLER FINANCING!
I just got back from another meeting with some of my investors, partners and students and found that one of them had taken my advice, followed my strategies and asked a bank for seller financing on a house that she wanted to buy from them. They agreed offering seller financing at 7% interest only payments. Our student has a one year call so that they can close on the property and sell it or refinance the seller financing in plenty of time. The house provides a $450 per month positive cash flow for the investor.
The crazy part is that my student didn’t stop there. They ended up asking the bank if they had any other properties for sale and found one that the bank owned (because they took it back) that had a mixed use zone on a piece of land smaller than an acre. They are going to have a floor of commercial space on the first floor and over 30 condo units on top on less than an acre sized lot! My student will be able to buy that for about an $800,000 purchase price.
This property will require less than 25% of their own money out of pocket and be financed again at 7% interest only as seller financing from the bank. Since the bank was giving them an extended time frame to close (due to their contract strategies and negotiating time frames) they will be able to pull a building permit to build their project and start construction in less than 60 days after they close on the project.
I think the craziest part of all is the fact that this bank has also committed to do a construction and development loan to get the project built behind their seller financing so that my student will be able to get the original seller financing paid off. WHAT A DEAL! My student Roberta was so stoked I don’t know if she could see straight.
What many of you don’t realize is that with all the foreclosures and repossessions going on in the marketplace right now, banks are holding near record numbers and amounts of non-performing assets and mortgages. What are these banks going to do with all of these properties and non-performing debts? Many banks have so many of them they can’t get to them all. They literally have boxes and boxes of non-performing files. Why do you think some of these banks are taking 5-6 months or more to get an answer back on a short sale?
I find it odd, amusing and titillating that I can go into a bank, ask for a mortgage, get rejected, talk to someone else in the bank about getting seller financing (which requires less paperwork and far less credentials) and get a yes. HILARIOUS! We are entering a new age of seller financing. Everyone, including banks, will seller finance.
Savvy investors will do anything to learn these strategies and techniques and them implement them. How much do you really know? What are you prepared to do to learn more?
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