How To Build A Very Profitable Seller Financing Business Without Equity At All

** Will build a very profitable Seller Financing business with no equity at all !!! **

Today I will tell you how each and every one of you can and can start investing in real estate tomorrow, making dream returns and a relatively low risk level.

To begin with: You have no equity at all. So Phase One raised or raised $ 30,000. How? A number of options are open to you:

1. Take a commercial loan at the bank (about NIS 100,000) - try to make the payments spread as long as possible and in any case not less than 5 years.
Disadvantage: high monthly payments
Advantage: It's easy to get such a loan. There is usually no need for a property lien.

2. You can get a loan up to 50 of the value of your current property (mortgage + supplement).
Advantage: low monthly payments (the loan is spread out for a long period of up to 30 years) and a low interest rate.
Disadvantage: Additional lien on your property and many documents are required.

3. Other people's money: PRIVATE MONEY LENDER
Your private lender can be parents, siblings, uncles… close friends, co-workers. First circle mainly of family and friends.
You offer them to invest in you for a fixed interest rate that is not dependent on the performance of the project.
Advantage: Monthly refunds are relatively low because only the interest rate is returned and the principal is returned at the end.
Disadvantage: Usually, these are loans for a relatively short variety (one to three years), at the end of which the entire fund must be returned.

Okay now that we've raised $ 30,000 we're starting to work:

1. From a “slow” market in the US such as:

Birmingham - Alabama
St. Louis - Missouri
Memphis - Tennessee

2. You start looking for private homes in the city where you chose the price range of 25,000-50,000 $.

3. Focus on homes that they can sell for AS IS that require minor repairs.

4. Offer bids of 50 to 60 percent of the requested price.

5. Now let's say your offer for an asset requested by 35,000 $ and your $ 22,000 $ bid has been accepted.

6. You bought a house for $ 22 (you still have $ 8 in excess…) and you immediately return it to the market for sale with owner financing on the following terms:

Price: 45,000 $
Down payment: $ 2,500

Interest: 9%

10 year owner loan - principal payment and interest payable per month: $ 570 per month.

I assume that the rent on such a house will be 650 to 700 $ so that the buyer is a great deal especially that these buyers can not usually get a bank mortgage.

So what we gained from this transaction:

570 $ * 12 months = $ 6,840

Return on Investment: 6,840 $% 35 !!!

22,000- 2,500))

True you say there is also a loan that we took and should be returned so in which suppose we took a $ 22,000 loan from a private person at 8 percent interest only.
So we have to pay $ 1,760 every year.

6840-1760 = $ 5,080 per year Net income on one transaction of 22,000 $ without equity only!

Now it is replicated and done it 12 times and generate us a monthly income of 5,000 $ per month, for 10 years.

Yes it is clear that in a short post you cannot get into the subtleties of the deal and the very important highlights ... but what is important is that the method works and big time.
How do I know she works? Because that's what I've been doing myself for more than 4 years.

So go to work…

Yours, Shai Halevy

Link to the original post in the United States Real Estate Forum on Facebook - Works on a desktop computer (To view the post must be members approved for the forum)

The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion

• Hen Lang
• Wow I didn't understand anything !!! From the moment you found a property on 22000 you lost me
• very interesting,
  Do you transfer the property to them and make a warning note like a bank?
• Very nice. Sending you a private matter
• Uri Lev Ari What do you think?
• Just a domestic question that costs $ 45,000 in the rental of 600 $ * 12 = $ 7,200 it means a return of 16%. And there is a problem - and the tenant does not pay what happens with the mortgage in Israel?
• 1 and 2 options for raising money
  ... with caution because it has an impact on your home budget and it's not free.
  There are costs around and so a good good look at how much remains in the net
• I did not understand point 6. Who sells to whom and who pays the financing owners?
• Roni Kagno
  Send me your opinion in a message
• I liked… “Slow Market”…. It is nice that you notice the concept, because many investors do not understand at all what the market rate is.
• What happens if the tenant stops paying after a few months? And also destroyed the house during this period
• Ben-El Makhlouf
• Huge leverage risk of nearly 100%.
  Remote Management.
  It looked pink and I would not have done it
• Crazy level of risk. Too many things can go wrong especially in homes within the price range you specify. It seems like a recipe for bankruptcy.
• Naor Fliker
• You were very curious about me. Sending in details
• Did you manage to do 12 deals like this a year? From what I've been researching a bit in recent years there are restrictions on this issue in the United States, there is a law called Dodd Frank that limits these number of transactions to 3 per year. (Maybe in some countries this law is different .. don't know)
• You are a giant! Thanks for the post. very interesting.
  There's also a nice video of Morris talking something similar.
• Where can I hear you talking about this more detailed?
• In the United States everything can happen, but you still need a lot of luck and faith to succeed.
• king
• Cannon Thank you so much for sharing!
• Thanks for sharing, but the truth is, I did not understand the calculation: You are returning $ 6840 $ per year (according to Spitzer I got more like 6480 $).
  Interest on the loan you take is $ 1,760.
  The whole transaction cost you $ 19,500 (assuming no payments other than the property).
  So far, she turned.
  But out of the 6480 $ more part of this fund, you also return it one way or another. That means the interest you get should be more like $ 3,720 a year.
  Less interest you pay - you are already less than $ 2000 a year in profit.
  That is more towards the 9%. Not bad at all, but not 37%…

  Then 2 questions arise:
  1. Is for 9 a percentage worth all the risk of a loan (then there is a reason why the bank does not choose a loan, does not) and all the investment at all?
  2. If the rent exceeds the monthly rebate this way, why not rent it and that's it?

• You should have started the post by containing marketing content. You probably are good marketing if you managed to raise over $ 1,000 from others.
• I didn't understand the premise that they would sell you 50 to 60 percent of the asking price (probably because there are no better offers) and when the property comes to you, better offers will suddenly flow. And all this without considering any incidental expense and ignoring BALM!

• He will be offered offers from people who are unable to purchase in relatively small installments
• Nice idea. Just don't seem so applicable to an Israeli investor to get a property at 22,000 and immediately after that to sell it at 45,000, there are thousands who would be willing to enter into any such deal. The intervals are more likely to be smaller. After all, if there is a buyer on 45,000, it is likely that it also existed before it could be purchased around the 30,000.
• Asaf Azulay