Buying Homes in the US with Seller Financing Financing Buying Homes in the US…
Purchasing homes in the United States with financing from the seller - Seller Financing
Buying US Homes with Seller Financing as a Way to Create High Returns on Capital:
The US real estate market is an elaborate market where there are many tools that can be used - tools that are virtually non-existent in the Israeli real estate market.
The US market allows tremendous creativity in real estate and should be exploited.
One of the best methods for an Israeli investor to start building a portfolio of income-producing properties is to use a technique called owner financing.
Israeli investors, with an emphasis on early-stage investors, find it difficult to obtain mortgages from banks in the United States.
All the more so when it comes to homes that are worth low (eg homes of 60,000 $).
US banks will usually want to lend an amount not less than $ 100,000 to foreign investors and this is also subject to various conditions that we will not enter into in this post.
In contrast, in many U.S. markets, low-value assets can be purchased with owner financing.
The seller will be an entrepreneur, investor or even a homeowner who has been unable to sell his property for the price he wanted. He will always be an otherwise motivated salesman that won't work!
This technique of buying properties with financing from the seller will work well especially in "slow" markets in the US
(Everything is relative of course…).
Examples of markets that will be particularly appropriate:
The US market allows tremendous creativity in real estate and should be exploited.
One of the best methods for an Israeli investor to start building a portfolio of income-producing properties is to use a technique called owner financing.
Israeli investors, with an emphasis on early-stage investors, find it difficult to obtain mortgages from banks in the United States.
All the more so when it comes to homes that are worth low (eg homes of 60,000 $).
US banks will usually want to lend an amount not less than $ 100,000 to foreign investors and this is also subject to various conditions that we will not enter into in this post.
In contrast, in many U.S. markets, low-value assets can be purchased with owner financing.
The seller will be an entrepreneur, investor or even a homeowner who has been unable to sell his property for the price he wanted. He will always be an otherwise motivated salesman that won't work!
This technique of buying properties with financing from the seller will work well especially in "slow" markets in the US
(Everything is relative of course…).
Examples of markets that will be particularly appropriate:
Birmingham - Alabama
Cleveland, Ohio
St. Louis - Missouri
Memphis-Tennessee
And more ...
The emphasis on market research is appropriate: a market of high returns
For example the market where on the house of 40,000 $ you can get rent of 650 dollars and more.
Or for example the market where on the house of 70,000 $ can get rental of 1,000 dollars and more.
Now a comparison is made between 2 and investors who have the same equity:
40,000 $.
Cleveland, Ohio
St. Louis - Missouri
Memphis-Tennessee
And more ...
The emphasis on market research is appropriate: a market of high returns
For example the market where on the house of 40,000 $ you can get rent of 650 dollars and more.
Or for example the market where on the house of 70,000 $ can get rental of 1,000 dollars and more.
Now a comparison is made between 2 and investors who have the same equity:
40,000 $.
The first investor was called Uri:
Uri decides to buy a house at a cash price of $ 40,000. He found such an asset at 40,000 $, which has a market value of 47,000 $, meaning that after the acquisition he has one property worth 47,000 $.
After the purchase, he finds a management company that finds a renter who pays $ 650.
We will apply the 50 rule and assume that each month 325 $, ie $ 3,900 per year.
ZA Shauri generates a% 9.75 return on his investment and capital.
Uri decides to buy a house at a cash price of $ 40,000. He found such an asset at 40,000 $, which has a market value of 47,000 $, meaning that after the acquisition he has one property worth 47,000 $.
After the purchase, he finds a management company that finds a renter who pays $ 650.
We will apply the 50 rule and assume that each month 325 $, ie $ 3,900 per year.
ZA Shauri generates a% 9.75 return on his investment and capital.
The second investor is called Danny:
Danny decides to look for houses whose sellers will agree to sell him the house with owner financing.
After a period he located and purchased four such assets in the equity of 40,000 $.
Every property cost him $ 40,000.
25% of the value of each asset in equity ie 10,000 $ and the balance 30,000 $ financed by the owner selling to 5 years with the deployment of mortgage payments to 30 year and 6 percent interest.
After a period he located and purchased four such assets in the equity of 40,000 $.
Every property cost him $ 40,000.
25% of the value of each asset in equity ie 10,000 $ and the balance 30,000 $ financed by the owner selling to 5 years with the deployment of mortgage payments to 30 year and 6 percent interest.
Now let's look at what Danny has to say:
4 Properties acquired at the price of 160,000 $ and assuming that he purchased them at the price of 85% of the market value, he holds assets worth about 188 $ 1,000.
He now rents out about $ 650 dollars, which means $ 2,600 for all four properties.
Again according to the 50 rule the percentage remains for him each month 1,300 $ and 15,600 $ per year.
But - since he financed the mortgage purchases he received from the seller he would have to say goodbye to $ 719 a month and $ 8,628 per year.
So leave him 15,600-8,628 = 6,972 $.
Remember that he spent his money 40,000 $ and therefore his return on capital (CASH ON CASH) is:
40,000 /, 6,972 =% 17.5 !!!
In summary: Uri generates a return on capital of% 9.75 while Danny% 17.5!
In addition, by purchasing 4 assets at a discount of 15, 28,000 created another theoretical capital for 7,000, compared with Uri, who increased his capital by only $ XNUMX.
If you are interested in learning how to locate and purchase property for purchase with owner financing and many other techniques for acquiring non-equity assets using creative financial techniques you are welcome to join the unique course I am providing.
All the material I submit is based on transactions that I have made myself and with great success. I will give you all the tools I have accumulated and you can take your investment a few steps ahead.
Anyone interested: Contact me personally and I will give you all the details.
Good luck to everyone and think creatively!
He now rents out about $ 650 dollars, which means $ 2,600 for all four properties.
Again according to the 50 rule the percentage remains for him each month 1,300 $ and 15,600 $ per year.
But - since he financed the mortgage purchases he received from the seller he would have to say goodbye to $ 719 a month and $ 8,628 per year.
So leave him 15,600-8,628 = 6,972 $.
Remember that he spent his money 40,000 $ and therefore his return on capital (CASH ON CASH) is:
40,000 /, 6,972 =% 17.5 !!!
In summary: Uri generates a return on capital of% 9.75 while Danny% 17.5!
In addition, by purchasing 4 assets at a discount of 15, 28,000 created another theoretical capital for 7,000, compared with Uri, who increased his capital by only $ XNUMX.
If you are interested in learning how to locate and purchase property for purchase with owner financing and many other techniques for acquiring non-equity assets using creative financial techniques you are welcome to join the unique course I am providing.
All the material I submit is based on transactions that I have made myself and with great success. I will give you all the tools I have accumulated and you can take your investment a few steps ahead.
Anyone interested: Contact me personally and I will give you all the details.
Good luck to everyone and think creatively!
Yours, Shay Halevi
Such techniques are good for YouTube videos. In reality, things are much more complex.
Suitable for assets c and below. And you undoubtedly are buying at a price above the market when there are no buyers, and you are the only sage who sees the potential.
What's more, only a desperate seller with a problematic asset would go into such a sales outline.
As always, I would love to commit suicide!
good luck!
The shortest way to foreclose on your home, SELLER FINANCING will never come with relatively high interest rates, usually accompanied by a relatively high selling price for investors only and C-class assets.
bomb?????
Sing-er Yosef
Moshe Orange
Thanks, very interesting and creative
The explanation is comprehensive
but
It has one problematic figure that changes the picture
After 5 years the rest of the money should be brought
Also as the interest rates have been declining above 6
In the annual 8-12 area
And there are owners who only agree to two years and interest payments only
In this case, is the property listed on the investor's name or registered on the seller's name until the payment is completed?
Noam Davida Vadim Lichtik
Raz Yore
Yaniv Spitz Guy Levinson
Shay Halevy
The question is whether the discount of only 6% for an owner loan is correct…
warmly recommended.
Shay a pro with amazing financial vision.