Hey everyone, how's it going? This is Seth Williams. You're listening to the REtipster podcast. Today, I'm talking with Joe and Jenn DelleFave.

So one of the huge advantages real estate investors have, whether they realize it or not, is being able to buy properties with owner financing. And if you buy properties with owner financing and do it consistently, it opens doors that simply aren't available when you're relying entirely on banks and funders and hard money lenders. The challenge, of course, is that most sellers don't necessarily want to become the bank. They either don't understand it or they aren't hearing the terms or the information or the compelling reasons why they should sign up for this and wait to get their money later instead of getting it all right now. And a lot of real estate investors understand the mechanics of owner financing. You know, they know what a note is and they know what an interest rate is and they know what a balloon payment is, all this stuff. But getting a seller to seriously consider those terms and say yes to them, that is a completely different challenge. And Joe and Jenn have built much of their business around that challenge. They figured out how to make this work across multiple types of real estate, and they found a repeatable way to approach these conversations in a way that most investors never really learn. Today, we're going to dig into what those conversations actually sound like, how to structure them, what questions they ask, and where investors commonly go wrong, and whether there is a repeatable framework that ordinary people like you and me can use in our own deals. So if you've ever looked at a property and thought, man, I would buy this all day long if I just didn't need a bank loan, this is the conversation for you. Joe and Jenn.

Welcome to the show. How's it going? Bam! Thanks for having us on. Yeah, so excited to be here. Yeah, of course. Let's talk about a little bit of an origin story here. What first led you down the path of buying real estate with seller financing instead of just traditional lending? How did you get into this? Well, I kind of got into real estate by accident. My friend bought a course on TV 26 years ago. You see those late night infomercials. Was this like Carlton Sheets by any chance? It was actually Ron LeGrand. Carlton Sheets was one of the other ones on TV like all of the time, but he was the guy who actually went and bought it, but then never opened it. So a bunch of us friends were all hanging out one day and I saw this and I'm like, this is still in the wrapper. Can I borrow this? And at first he was a little hesitant, but I'm like, you never opened it. Like, I'll give it back to you. I still have it right over here. That was 26 years ago. But what I did was, this is what taught me how to get into real estate with no money.

Without using credit, which was great because I was 22 at the time. I had bad credit and I had no money. So what I did with the books and the VCR tapes said, and I ended up flipping my first property without using a bank, without using any money at all of mine. I only owned the house for half an hour and I ended up making almost $13,000 back then. And to me, I have never seen a check that big in my life. I had all my family who was like, this is a scam. You don't have any money. what are you doing in real estate? So it was really neat because I got the money and it also like silenced the critics. So that's what got me like hook, line and sinker of me getting into real estate. But when I met Jenn in 2008, I had a job at a car dealership. I was in the finance office and Jenn was a school teacher. And soon to behold, we were going to be accidental landlords because Jenn really liked me. And so she moved into my house and we ended up renting out her old house that she bought. And that's our first step into being a landlord back in 2008.

Oh, crazy. Yeah. What was happening was we had this idea of maybe we should buy some more properties. In 08, many of you remember there was like a market that was kind of dipping. We're from Rochester, New York. So it didn't really feel like it that much up there, but we found a property in one of my old neighborhoods. That was a great neighborhood. Just, it was a rundown house, vacant for years. So we ended up buying that property. And this is when I didn't even know it was called the BRRRR method back then, where you're buying a fixer upper. We remodel it. But we rent it out, we go to the bank, pull our cash back out and go find another deal. And that was working until it wasn't because doing the process was really slow. I mean, to find a deal, to get all the things and renovate it for five, six months, we were only doing about one deal a year, not too crazy, but it was, it was growing slowly. But in 2016, now we're married, we've got kids and Jenn walked away from teaching and.

And I'm refinancing out of one of our next deals at my bank. And I'm friends with all the bankers there. And they said, Joe, at 10 properties, like, what are you going to do next? And I was like, what do you mean? I've got great credit. And I didn't know they capped me at 10 loans. So I felt like completely defeated. I did not know what to do next. And so I started going down the rabbit hole. And now this guy, Ron LeGrand, had a YouTube channel where he's talking about how these methods of buying real estate without these huge down payments, without needing all this money. And then if you can skirt around not using banks, I was like, oh my gosh, this is for me. And the neat thing about it wasn't anything that Ron invented. This has been going on for centuries. Seller financing. You want to buy something from somebody? Just pay them in payments. Sometimes they could do that.

So the thought of it working on houses was very new to me. I never thought of that before, even being a thing until we started just putting the driving gear and go. And lo and behold, it's built us a multi-million dollar portfolio over several different states. We've done deals in over 20 states around the country just by getting the simple framework of working with motivated sellers and offering them great terms. And this is one of the things that when we found this out, like our head exploded. I'm really fascinated to talk more about this because I've been aware of this idea of buying properties with owner financing, sometimes sending a seller multiple offers with different versions of seller financing. One might be a cash offer, one might be owner financing with no down payment, little down payment, that kind of thing. So the mechanics always clicks in my head. But for me, where it falls apart is just the conversation. I wouldn't even say it falls apart. I can do it, but I'm always wondering, is there a different way I should be saying this? Or is there a better a way I can start this before we even go down there so they don't just immediately put up laws and say no. Do you have some magic trick to that? What is the process you go through to lay the framework before you even propose the idea of buying with owner financing?

What happens first? Take me through that. Yeah, that's a great question. Well, first we work with sellers. We get inbound leads and we're going to talk about a way how to find these people for free and better yet, how they're going to find you. But what happens, we'll get an inbound lead. Somebody will reach out to us with a house they want to sell. First thing I want to do is gauge their motivation, we actually created an internal chart of one to 10 motivation, 10 being the most motivated. One is they're not even sure they really want to sell. What I found out from doing this for 25 years, the most motivated people, those are the people you're going to do business with. The eights, nines, and tens, like the most motivated. If they don't even know if they want to sell, like you're never going to do business with them ever. So first thing to do is find motivated sellers. And then once we get a motivated seller, they fall into two different buckets. The first ones that I was looking at before were all of the fixer uppers, all of the junkers and nice neighborhoods that we're going to get at extreme discount.

That I could go pay cash for and flip them or do the BRRRR method. Anytime somebody reached out with a really nice property, I would just say, I can't help you go list it with an agent. I can't pay full price for your property. And I didn't realize those were the best deals that we're passing on. And those are all the nice ones. So for me, I'm a buyer. I worked at a car dealership. The very best buyers, the people who are coming and buying cars were the ones that had the right questions where we had to give them all of the information so they could buy. But those are the ones that found out how to get the best deals. So what I found with doing real estate, we're the buyer this time. I'm not selling anything.

They're trying to sell me a house. So I'm going to have a list of questions that I like to ask the seller where they're going to actually make me the offer.

I don't give multiple offers. I find out what's going on in their situation, a motivated seller. Because here's the thing, we're in South Florida now. These homes are half a million dollars, a million dollars, 2 million, 5 million and up. And when you're talking with a motivated seller that has a really nice house, if I'm going to make them a cash offer at some huge discount, they're never going to go for it. You're literally just wasting ink if you even write with pens anymore, or if you're just messaging them. So what I found, what I really loved was like, if I could pay your price, if you'd be open to terms. And so like we just bought one, we just closed on it. And it was a turnkey house in Sarasota County. The guy bought it, lived in there for a few months. His job took him to California. He's now an accidental landlord. He's renting out his house. He didn't buy it to be a landlord. So when he reached out to me, cause he saw me posting that I buy houses, he reached out to me. I asked him a couple of questions. He made me the seller financing offer, which was I'm buying the house for what he owes on it. He bought it at $290. He owed the bank $255. And I was able to buy the house, no down payment. And he has a 3.25% interest rate. And Seth, this was the one thing that changed the game for us. I did not realize that I could buy a house and have the loan stay in the seller's name. And the reason for that is because I could get a low interest rate and a super low payment. Because right now at a 3.5% interest rate or 3.25%, you go to the bank right now, that rate is more than double that.

As we said today. And that's the difference of that property, cash flowing or not cash flowing. And he really didn't have much equity. So he didn't care about getting cashed out. He just wanted to get the landlord duties office back, get the responsibilities office back and have a quick, fast, easy sale. So I asked him a handful of questions. He made us the offer. I looked at Jenn. I'm like, here we go. So I think it's really helping people solve a problem with the house without having to give them a lowball offer. And these are all the nicest houses. These aren't the junkers and the in the tough neighborhood these are like beautiful homes some of them are just the middle class home the starter family home and some of them are some really high-end stuff too.

And when you could explain to them the reasons behind it, you have all of the right attorneys and title companies to help make sure the process goes smoothly. You're just helping people solve their problem on another way than just the fixer uppers, because a lot of people have nice houses, but they still have a real estate problem. A couple of big questions are coming to mind. So you said finding the motivated sellers. That's obviously a key component here. It's not even worth your time talking to somebody who's not motivated. It doesn't want to sell. So what is your answer to that? I know many ways to do this, but like, what's your secret sauce for finding these people that kind of fit the profiles, the kind of property you want to buy. And there's motivation there. All lead generation works.

You could do mailers in the beginning. That's what we were doing. We were sending out direct mail. You could do cold calling. I've got a lot of my friends who do that. I've done it. I don't like doing it. Sending out direct mail works, but it's very expensive. So it was like Google ads or anything else like that. What we discovered probably five, six years ago was how to post on social media, especially on Facebook into Facebook groups. So for an example, we live in Sarasota, Tampa area. There's a lot of Facebook groups here. There's tons of different ones. I just join them. I joined the moving to, I love the community, Tampa. I'm in Tampa mom's group. Okay. And there's 44,000 people in this Facebook group. So when I make a post in that group, and we're going to share the exact words that if your listeners are listening, you could go do this today. And if you start doing this today, you could have leads coming into you tonight, inbound free leads, and you could target anywhere in the country. Easy peasy lemon squeezy. Um, so I just go to Tampa in the search bar in Facebook under my own personal profile.

It's going to show me all these groups. I just join all the big ones, all the ones that got a lot of people in them. When I make my post inside the group and it just says, this is a writer downer. Does anyone have a house for sale that's not market ready?

I'm looking to buy one in the next two to three weeks. And before I hit submit, I make the background like blue or pink. So it really pops in the group. I'll put that in the three or four groups a day. Some of these groups, you won't get much. Some you get a couple of leads. Some you get a few hundred leads. And these are just people DMing you. They're leaving a comment. I want to sell mine soon. It's not on the market yet. We're thinking of listening next year. There's all of these comments that start going. And it's just conversations. And you're talking with locals. This is what I love about it. I mean, if I want to target New York City or Los Angeles, California, go in there, Los Angeles, California, all these groups of in LA, wherever it is, it even works in small town USA. So we target areas that we want to buy.

We join the Facebook groups. We're making that post three, four times a day in these groups takes only 10 minutes to do. And now throughout the day, I'll check my DMS. I'll check the, I'll get notifications. Like people are commenting on your post. And some people just like, yeah, I'm looking for one, two, but you get a lot of inbound leads, our record. So if anybody listening does this and our record is 1100 comments in one group. So if you beat that, you've got to take a screenshot and send it to me. So you'll be the new record holder, but it, this stuff works. And then after that, you know, we start getting into the DMs. That's where the magic happens. That's where I'm asking like, Hey, what's got you thinking of selling? How soon do you want to sell it? What kind of condition is the property in? Seth, I've had somebody say, what's a 2000 square foot house worth in this zip code? I'm like, what's the address? I'm not telling you the address. Like one motivation moving on quick. I won't even talk to you anymore.

But then I've had Tyler who was like, Hey, I bought this house. I only lived in it for four months. I moved from my job. I don't want to be a landlord anymore. I want this thing gone like yesterday.

That's the person you're going to want to talk to first out of the two so don't waste your time, what most people do with unmotivated sellers you're going to feel frustrated you're going to say it doesn't work and that doesn't matter what it is if you talk to a one two and three on the lowest scale of motivation you talk to 100 of them today you're going to be banging your head against the wall wondering why you have a headache, but if you just talk to five to ten, truly motivated sellers a day your business will be completely different and are all these conversations happening through dms i mean i'm assuming so because it's social media right yeah and you can also give out your cell phone number sometimes you know it's a little easier to message back and forth but what we found was if you hop on a phone you're more likely to then start explaining, seller financing terms what you might do with a property all the things about the house and it wasn't even a motivated seller to begin with so to just kind of you know the time is really important. So using it efficiently, we find that that little hack just to kind of answer a couple of questions through messaging. And then, yeah, if they're like, well, tell me more. Yes, I'm interested. Like Tyler, like that was an immediate phone call.

Sure. A few other just mechanical questions about this post. Are you including an image with it when you post it out there? Or like, are you posting just plain text? Or do you make it one of those like colorful banner things? Or is there some algorithmic trick to make it get seen by more people? We've tried all of that basically but for some reason it's just those exact words and then choose a color background so blue pink yellow you know whatever color you want, the emoji ones don't work very well so stay away from that but there's something that just makes it pop and people read it and they stop and again if it's a public group like it's going to pop up on people's feeds too and so again let the comments roll in and this is where you have to have a little bit of thicker skin just like if you were door knocking you're gonna get door slamming your face or if you're cold calling people might you know, swear and hang up the phone on you. People are going to say silly things in the comments, ignore them, but it's going to help boost your algorithm because Facebook doesn't know the difference between a negative comment or a positive one. And we're always just like, oh, we're just, you know, a couple looking to buy a house and just keep it like that. And again, it's just being more human and not like a big, bad investor company. People sometimes just want to work with someone that just gets them. Yeah. And you said it perfectly. It's just being engaging in the comment section so every comment that somebody leaves they get a reply comment, And it could be like, hey, I'm thinking of selling mine soon. Can you please send me the details? Or, hey, you're a scam. No, I'm not a scam. I'm just a guy looking at buying a house, right?

Every comment, because the more comments that you have in the post, the more people inside these groups will see it. So if you ever see on Facebook, there's that button for boosting your post and it costs you money. Well, those algorithms are boosting it for free. You don't have to spend not one cent. So anytime, I guess the big advice is when somebody leaves you a comment, reply with a comment, always keep it positive, always keep it moving. The best ones go into the DMs, but here's the next check.

Is check your dms because many people don't even want to leave a comment they'll just send you a message and if you're not friends with them you actually have to check on your phone there's a special spot for your spam messages this is when people send you a message you're not friends with check that box because the first time i found it i had.

Hundreds and hundreds of messages i couldn't i didn't even know we're there i'm like oh i lost him for like a day or two he was just like in the dms i'm like oh my god these people messaged me for two years ago wanting to sell their house. Is it still for sale? Right? Like that stuff was happening. So make sure you check your spam folder huge. But you know, if, if I get 10, 15 leads in a day with me, just asking them a few questions on DMS, I might weed out almost all of them. I might get two or three good ones. Those are the only two or three I'll be on the phone with because we're busy. I don't have time to talk to 15 people a day, every single day, especially low motivation. So I use my couple questions to filter out the unmotivated people. Do they actually want to sell? What kind of situation are they in? What kind of situation is the property in? And then how soon is it they want to sell? And if you say, Seth, I need to sell now. I've already moved. I'm in Michigan and I've already moved and the house is vacant in Florida and I'm making two payments and I can't afford it anymore. Like that's a call to like drop what you're doing and call right away. So it sounds like when people leave comments, whether it's positive or negative, you always leave a comment, reply back to their comment and then if they don't proactively dm you and if they're not saying something negative you dm them instead of the conversation.

I'll just say like hey can you please send me the details i'll leave that as a comment okay so no matter what you rely on them to start the dm you're never starting it with them, Well, a lot of times I don't. And the reason why is because if it goes into their spam folder, man, some of these folks have a hard time finding where that is and some of it will get lost. So if I'm like, hey, Seth, can you please send me the info on that property? And then I could click on your name, go to messages and see where you send it to me or go check my spam folder too. And then if I haven't received it, like, hey, Seth, just checking back, can you send that to me? Right. So I could kind of control that a little bit better. But you could, and I would friend request them too depending on if you're maxed out sometimes you can only have 5 000 friends but sometimes if i go to message someone and i'm not friends with them i'll use that little hack of like friend requests so now it really pops up onto their feed and they see like oh this person's trying to connect with me, are you using some like software to keep track of all these different comments and dms and like who seems motivated and who's not like, it seems like a ton to keep track of especially if you got 1100 comments coming on a one post what's your trick for that if you get 1100 comments. Good luck.

I realize that's not the normal thing. Oh my gosh. That is actually like the gift and the curse all at once. Cause you have all these people wanting to sell a property, but I think it's really crucial is what I like to do is, and we have a system, a CRM that I use, but this is where I'm only keeping track of the motivated sellers, or maybe they're not quite motivated yet, but they're in a motivated situation. I've already moved. I'm making two payments. I don't want to do seller financing. I'm going to list my house on the market. That's fine. Maybe we're not making a deal today, but if they list their house and two months go by, three months go by, six months go by, and the house isn't selling and they're making double payments, their situation could change over time. So I'm still keeping track of them, even if they just say, no, you know, seller financing, I don't want to do that. But if it's somebody who has no motivation, they're not even sure if they want to sell.

I won't do seller financing. I need my money. Like, I don't even keep track of those people. I just say, thank you so much for reaching out. Appreciate it. That one doesn't fit. And I move on. You got to find what works for you. I always tell people, it's like whatever you're actually going to use. So we're going to date ourselves. And we got started. It was literally like a one through 31 accordion file folder from Amazon for like $17. And we would handwrite on a property sheet and then put it on that date. So if today's the 24th, then in a month from now, I'm going to go back to that sheet, pull it out and call that seller, you know, to see if they sold that house yet. That's archaic. But nowadays, you've got plenty of options. There's really inexpensive CRMs. There's tools like Notion. And so it's just being a little proactive of like, how can I get people that are motivated into some sort of database? I even say, like, use your Google calendar. Like, you got a hot lead to put the seller's address, the name, number and that like what day you're going to follow up in two weeks. You know, don't overly complicate it because we're all really busy, but this is something where even if you're trying to get one more property this year.

Just really, you know, get the details and stay organized and do it consistently. And don't think about all of the hours you don't have or all the tools you don't have yet. And I see more people spend money on leads and CRMs and websites, and they can't even figure out how to get a deal because they're not taking what we call that messy, massive action. And that's just getting into the DMs, asking the questions and hopping on the phone with motivated sellers. Now, when you're making these posts in Facebook and then the DM conversations start, are you using a personal Facebook profile to do this or a Facebook page to have the conversations? You're going to be on your personal Facebook page. For that reason, a lot of groups don't allow business pages to post into groups. But with that said, I always encourage you to have a business page. It's totally free. It's like a virtual storefront. It costs zero dollars and you can have a working email address. You can post on it consistently. You'll see like a sign behind me full price for your house. Like I'll like take a photo of myself standing outside and just kind of keeping it updated and it's evergreen content. So when the sellers come and look up you and your company, they can get to know a little bit more about you. That know, like, and trust factor is really crucial, especially nowadays, because people are leery of, you know, are you real? Are you not? Are you a scam? And so give them something to look at.

But have everything really open on your public personal page. Make sure that you look like a real person, that you're not hiding behind a stock photo. Just take some time, use it professionally. And, you know, just a little bit of time and detail goes a long way. Yeah, I ask, as I know, with Stride CRM, you can actually have a conversation AI agent hooked up to your Facebook page, but not your personal profile, which can actually handle some of these conversations. Even if you don't do that, just them starting the conversation at all automatically can log their name and info in your CRM. Like just the fact that they're talking to you at all, it just puts it right in there. Is that a similar thing to how you have it? Or I guess maybe a better question is, when I think of all this data going back and forth, and when I say data, I mean just conversations, the DMs.

Are you able to use AI for any of this stuff to either automate the conversation or just like make sense of it very quickly so you don't have to like manually think through every single message that everybody's sending? Well, slightly. Yes. When you're using your business page, you could do all of those things. Super easy peasy. But I'm not doing that. Not yet. I'm not. Now, don't get me wrong. I'm running sponsored ads. We do all of that. I've got a fancy CRM. It does all the automation. We have that now. But if you're just starting off, the easiest thing to do, I just have a series of questions that I do. I have an iPhone, Android, it works too. I just program in my shortcuts, all of the questions, one question at a time. So if I hit Q1, it's like, Hey Seth, thanks so much for reaching out on my posts about houses. Can you tell me a little bit more about your property? And then you're going to message. And then after I get that answer, I just hit Q2, question number two. And it's like, bam, awesome. Thank you so much for that. How soon are you hoping to sell the property? And it's going to be like, Oh, and they just are going back and forth. So as I'm going throughout my day.

My 11 year old son does this for us. My 13 year old daughter does this for us. Cause they'll know what question they're on. Hey dad, I've already asked them question four. They know to ask question five. So I don't even have to tell them what to do. They just hit Q five and it just going to ask them the next question. It's already programmed. They're not going to change the question. They're not going to do anything like that. And it just feels like a very personal conversation. So like when I had our very first seller finance deal, Steve reached out to us, he inherited his grandfather's home. It was paid off a long time ago. When he inherited the home, he ended up renting it to a coworker. And he was like, I don't want to be a landlord. I live far away. I'm time to sell my grandfather's home. But when he reached out, he's like, listen, I don't want any of these lowball offers you investors give.

I'm like, Steve, what do you want for the house? He named his price. I'm like, I could do that if you're open to me doing a payments. And he was like, tell me more. So we went, looked at the house. This was 10 minutes from where we lived in New York. Nice house, great neighborhood, dead end street, back straight to the school, really where everybody would want to be. So when I talked to him about this price, I said, it's more fair if we could do payments. We agreed on doing a hundred dollars down and he didn't even want that. Like I was like, you have to take this $100 down. We paid him a flat $500 a month. And we explained that's going to go towards our balance of what we owe you. And he's like, yeah, that's fine. As long as you're going to pay my price. So he didn't even charge his interest. We got a 0% mortgage. Turnkey house, a hundred bucks down. After I did that, and I met him at McDonald's to finally sign the purchase and sale agreement, and I'm handing him the $100 bill. He didn't even want it. He loved us. He loved the process he loved that we could pay his price and if i could pay top dollar for his house which was still a discount he gave us but i'm able to pay his price because i'm able to break that up into payments and with a 500 payment we put in.

A rent to own renter somebody who was going to do a lease option, our renter gave us 10 000 to move in plus first month's rent so we actually got paid to buy the house we cash flowed 500 bucks a month meanwhile we're paying down our principal quickly And then years and years and years later, they don't buy in the house. So we actually got paid to buy the house in the beginning. We made great cashflow. We, And our renters took care of all the maintenance and repairs because that was part of the deal. And they wanted to do that. And then when they bought it, that's when we get the final check, that big, big, big back end check, which now we could pay off Steve, his balance. He was thrilled because his daughter was getting married. He's like, perfect timing. I could use the money for the wedding. And then we got our big check and reinvest that into more deals. Yeah, man. Well, I'm wondering. So whenever I hear about this stuff, I try to like really get down to the mechanics of what is happening. And when I say that, I mean, like, like what precise questions are you asking? Like the Q1, Q2, Q3, and then like, what has to be true or what answers do you have to hear for you to then get on the phone with them? And then what does that conversation sound like? So do you have like a, like an actual word for word script somewhere you can share with our people or, or just send it over? I mean, what, like the questions I heard you ask and where, you know, tell me about your property. Why are you selling? How soon are you looking to sell? what conditions the property in. What else? Seth, you already got it.

How much do you need for the property? What do you owe on it? And then the last question is, hey, if I were to pay that price, would you be open to terms? Okay. Gotcha. Simple. And many times they say yes, no, or I don't know about it or maybe. Now, based on some of their previous questions that they've answered is based on regardless of what they say on that final question doesn't almost matter to me. If they're like, I'm in no hurry. I'm not thinking even selling it yet. Unless I get my price. Are you open to terms? Well, maybe like, I still don't really want to talk to you because chances are you're very low motivation. But if you're like, Hey, listen, I've already moved. I'm making double payments or I inherited grandpa's home. Right. So we'll go back to seller Steve. And I'm like, Hey, Steve, if I were to do that price, would you be open to doing it in terms? And he's like, can you tell me more about that? How would that work? Instantly? No more messaging. Instantly I get it onto a phone call. And then I have my four questions I like to ask on every closing call, which is the four pillars to negotiating a creative finance deal. So the first question I always ask, Seth, I mean, I know that you're asking 200,000 for the property, but I'm not an agent.

So there's no commissions. And if we agree on terms, I'll pay all of the closing costs on both sides. So if I buy it as is, and I cover all the closing costs, is that the least you'd take for the property? And you're going to say, I'll get do 190. And I say, that's fair enough. I know more when I come out and see the property. Seth, I typically buy with no money down. Okay. And then you quiet, you don't say a word every single time where I think a lot of investors mess up. Hey, what if I give you 10% down and you know, a two-year balloon, like stop, stop, stop, stop. Or they'll send offers. Or they'll send offers. And I'm like, I never will send an offer. Like you can't never get me to send you one. I'm going to have this conversation on the phone or in person, most likely it's on the phone, but I typically buy with no money down. Okay. And sometimes they just say, okay, I did a call yesterday. And the lady is like, yeah, she's already moved out of the house. It's a villa here in Florida. Um, she's paying this HOA tax insurance. She doesn't owe any money on the property. So when I said that I typically buy with no money down. Okay. She's like, yeah. Okay. I said, perfect. My third question, if I pay the taxes and the insurance and the HOA, what's the least you take for the monthly payment? They're going to throw out a number. Sometimes they say, I don't know. Right. But they'll give me a number. She did. And then I say, got it. And if I were to do that price and pay those payments to you every month.

I've had some sellers, they'll give me 20 to 30 years before I have to get them cashed out. And some want their money a little sooner, Seth, like 10 to 15 years. So if I do all of this, what's the most amount of time you'd give me until I have to get you cashed out? I'm asking educated questions every single time. And now what I did, I identified the four pillars to create a finance deal, the price, my down payment, my monthly payment, and my term length. Those are the four things you need to do to understand a creative finance deal and the actual, What one matters most to me is the down payment. I want to buy with no money down because I still have to pay closing costs. I still have to put an insurance policy on there. I might have to paint a room, something like that. But these are nice houses. I'm not like fully remodeled jobs. So I want to be zero money down. This is why when we say we buy a house with no money down, we do all the time. But I still have to come up with several thousands of dollars in closing costs and attorney fees and insurance policy. But my second thing is my monthly payment. I need to have a payment that's low enough that I could actually cash flow.

So if the payment's way too high, I ran into one of these just the other day. Their payment's $900 more than I could rent it for. I'm like, well, that doesn't work, right? So I want to make sure the monthly payment's low enough I could cash flow. So down payment, monthly payment, my term length is my third most important thing to me. The third most important thing, do they want to get paid off in six months? That's a deal breaker, most likely. Do they want to get paid off in 10, 15, 20, 30 years? Now we're talking. And I've had so many sellers like, hey, listen, like, I don't care. I've had many give me 30 years so then my fourth thing.

The least of my concerns, the least of the ones I'm important is the price, which is their most important to the seller is their price. So once again, what's least important to me is most important to them. So what we could do is make a win for us and them. They got their price. I got my terms. And this is how we walk away. Both parties winning high fives, hugs. I can't believe we're able to do this. Oh my gosh. Because I've had many times stuff where somebody's like, hey, I want 200,000 for my property and it's worth that. might be even worth slightly more. They're reaching out to, I buy houses, investors who are all giving them half. They're trying to give them like half what the house is worth. And those are my easiest deals because every other investor say, I'll give you 110,000 for it. And I'm like, you want 200 grand? I could pay 200 grand if you're open to terms. The competition is so little. And if I'm able to buy a house for 200,000 with no money down, a super low payment and a really long term length, the price isn't really that important to me. Awesome. We just shared I got a bunch of different clarifying questions. So starting way back when we were talking about how you're having these DM conversations and you ask if I can pay your price, would you be able to terms and they say yes, no, maybe or tell me more.

And it sounds like if they say yes, under any circumstances, for the most part, you're picking up the phone then, right? If they say no, does that totally shut down the conversation regardless of what they said earlier? Or will you still call them even if they say no? So this is where it truly, truly depends on if they're a motivated seller or in a motivated situation. Okay. So if they are motivated, obviously, and they say no, you will still try to get on the phone with them? Absolutely. Okay. Absolutely. Yeah. Because once again, sometimes they just need a little bit more clarity of what does that even mean? Right. They just need to be walked through the conversation. And not only that, if they're going to talk to other investors, that's why they reached out to us. If they're going to talk to other investors, I'm going to be probably the only investor that's able to pay what they want for it. Because most every other investor is always paying with cash. And when I was only paying cash for my properties for my first 15 years of doing the business, anytime somebody reached out to me with a nice property, I'm like, I can't buy that. You want $200,000 for it. My number is $110,000.

I can't pay $200,000. I was passing up on some of the best deals. I didn't know that. So this was my mistake. So if I could find out like, hey, I've already moved. Like Kim, the lady I spoke to yesterday, she's already moved out of her villa. It's paid off. She's still paying $1,000 a month between taxes, insurance, and HOA. So she's still paying $1,000 a month and her property's vacant. It's already been listed on the market. It didn't sell. She's already listed it for rent. It's not renting fast enough. And she's still making this payment. So when I had the conversation with her, I'm like, hey, listen, this is what we can do. She's like yeah now we could talk about it in the beginning though kim was like i'm not open to doing terms so she came back around from some follow-up and why because she wasn't saying yes right away but now after it sat on the market and didn't sell now she's offering for rent and it's not renting and it's a nice property doesn't need anything she just had the rent way too high so she's not an experienced landlord so this isn't something she wants to deal with she's got a daughter she's got some things going on and she really wants to spend time with her daughter and their dogs they don't have time to be messing around with this property so in the beginning you're right But Kim said, no, motivated seller. You still get on the phone because she had a situation going on. And then now she's like, yes, let's go ahead and do that. And if somebody says yes to seller financing, but every other answer to every other question screams, I'm not motivated. I want a sky high price. Like nothing else sounds good, but they said yes.

You call them then? I mean, I might not have a 20 minute call, but at least keep it to five to 10 minutes. Sure. Okay. I want to find out what's going on. Cause sometimes you get like messages, you get lost in translation through a text message. I could text you one thing and you could perceive that same message, like several different ways. So yeah.

You know, maybe it's just like, I'm not in a hurry. Well, I'm not in a hurry till two weeks from now, right? Then maybe that's why they're in a hurry. So you really want to be like a detective. And we have to remember, we're not selling anything. We are the buyers. These people are trying to sell us something.

I'm a buyer. I'm an educated buyer. And not only am I an educated buyer, I'm equipped with the best questions to ask every single seller in any situation to where I could find out, A, are they motivated? B, do I have something that I should even be pursuing here? And if those answers are, yes, they're motivated and I should be pursuing it. I armed with the questions I gave you that I'm going to ask every single seller to where they're going to make me the offer. So when I'm buying a brand new house, like I just did not too long ago, New Smyrna Beach. I talked to the gentleman who's moving to Texas and he's like, Hey, I'm in Texas. I already bought my new house, but my wife and kids are back in Florida and the house. We don't really have a whole lot of equity in it. Cause there's a brand new build house and they only lived there for two years. So he was like, I don't know what to do. If I could even list it, I might not have enough equity. I said, then would you be open to terms? He said, let's get on a call and talk about him open to anything. So what we did, I explained to him, I walked him through the process, what we're going to do by the house. The loan's going to stay in the place because he's got a really low rate in payment. And he said, yeah, you just need to give me some money so I could get my wife and kids here. So I need some U-Haul money.

So we determined what that U-Haul money was. And then we just did the deal and reunited family. The family moved to Texas and life is good. Yeah. And I would say just like, again, with that motivation is like reminding them that you're going to be able to buy it as is, because even if it is a beautiful turnkey house, people got stuff and they get nervous of what am I going to do with this stuff? So that couple actually left some things behind that we did. It wasn't anything terrible, but some stuff that would have just taken more time and effort on the wife's part. And he didn't want his wife to have to deal with that. So I think they even left like their spectrum boxes. We had to get a mail to them but you're just going a little extra mile for people makes a huge difference they're usually stressed out in some of these situations and they just want some ease sure okay and if they say maybe or tell me more again it kind of goes back to the motivation question where as long as there's some sign of motivation, you would get on the phone and call them right and then have you sure and then when we talk about those four key questions so appreciate you teeing that up it makes perfect sense how you framed it that first question where you say i see you're asking X, but I'm not an agent, so there's no commissions. Is that the way it should go on the price? On that specific question, what do you need to hear? Like if they say no, the price has to stay higher. Or maybe they're asking like twice as much as the thing is worth and they're not willing to budge. At what point does the answer to that question kill the deal for you, if ever? I don't even care. They could tell me anything they want. They could tell me they don't like my dog. I mean, it doesn't matter to me. So if they say, no, I want my $200,000 price, it's me sticking my toe in the water.

I have to, before I dive in fully, because to me, once again, the price is not my biggest concern. It's my least out of the four concerns. My number one concern is about to come up next. And I use it as a negotiating leverage tool. Seth, I'm able to pay your price. That's how I have to buy it with seller financing with no money down. So I want them to feel like they win. And I'll give you an example, Kim, that Villa we talked about, she bought it two years ago for $205,000. When I talked to her on the phone, she originally wanted 200,000 for it, but it didn't sell. I just asked her one question. Hey, Kim, if I were to, you know, I'm not an agent, there's no commissions, there's no closing costs.

If I were to buy it and we could agree on the terms, what's the least you'll take? She's like, I could do 185. Like, I just didn't say, I just flapped my lips for two seconds. And she was like, bang. And I think that's where I kind of, because you love getting like super granular, you have to remember that it's kind of fluid. Like this might not all come out on one conversation. Like this was the first, like you said, toe in the water. So you want to gather your information, but then you're going to have to do some research. So I feel like a lot of investors, especially new ones, put this pressure on themselves with like, I got to do the geo on the closing, the one closing call. And honestly, sometimes it is a few conversations, especially if they haven't sent you pictures or you haven't seen the mortgage statement. And so just know that it's a little bit of a dance that you have to do. And it's not very black and white. And that's, I think, why I love the creative aspect, because there is just some possibilities there and you just have to build a little bit of rapport, get those answers, and you'll make decisions down the line. But you never want to press too hard, especially on the purchase price. Appreciate saying that. Is there a way you should be wording things so that you don't paint yourself into a corner and like accidentally commit or set the impression that you can do something that later you have to back out from like you basically just stay super noncommittal like this is just fact finding until I have all the information.

That kind of the way to approach it hey Seth thanks for all the info I'm gonna actually now do some research on these things that we just talked about the numbers to make sure it makes sense if we were to agree on this Seth how soon would you want to have this deal done. And if they tell me, I don't care, I'm in no hurry. Then if Kim yesterday, I've already determined the four points. Then after I'm like, Hey Kim, I'm going to do some research. I'm going to actually call the county tax assessor because I'm going to buy the property and I want to see what the taxes would be if I buy it. So I'm going to call them. I'm going to call my insurance agent to get a quote to see what it'll be for the insurance. And then if, if all that comes back, Seth, how soon would you want to get started on the paperwork and get this thing sold? And she was like, weeks ago, I was like.

There we go. Love it. Right. So now what do I do? I hop off the call. I'm going to do some due diligence to see, make sure the deal makes sense. And then sometimes we have to go back to the drawing board and say, Hey, you know what? After I talk to the tax assessor, because I'll give an example in some States like South Carolina, if it's your primary residence, your taxes are a fraction of what it would be if it was a rental. I mean, we had one, the taxes went from 1700 a year to 5,200 a year because it gone from primary residence. They give a really big discount. If it's your own house. You need to do your due diligence to understand if I'm going to buy at that price and it's going to be a rental, what will my taxes go up to? So part of the due diligence, and it only takes a couple hours to find out, calling the tax assessor, getting a quote from your insurance agent to make sure everything lines up right.

Then after I go back to the drawing board with the seller, hey, I talked to my tax assessor. They said the taxes will go to this. This is what the insurance would be. So if we could get that payment a little bit lower, we have a deal. It's just easy peasy. And here's the thing with creative financing, every single cash deal, we're only negotiating on one thing, and that's the cash price. We have to change our mind frame here. There's four things we're negotiating on a creative finance deal. So maybe I don't wiggle on, maybe like you said, they don't want to wiggle on the price. Well, listen, Seth, so if I were to pay your $200,000 price, I know you want to get paid off in 10 years. But if I do that after tackling the tax assessor, is there any chance I get that bumped up to 15 to 20 years? The creative end of it is learning how to negotiate, not just one thing, which is price. Because if I'm a cash buyer and I'm buying that fixer upper right there.

The only thing that matters is the price. Or maybe they want money down, but then you do a little due diligence and something needs to get fixed on that property and say, hey, like I just found out that this has to go. I have to go do this. It's going to cost us them out. You know, are you OK with no money down now? And usually it's OK. Yeah. On that next question, you say, I typically pay with no money down and then you just wait for them to respond. So if they do not respond favorably or if they say, I don't know, I want 20 percent or whatever it is. At what point is it a problem for you? Oh, yeah. 20%. No way. I could get better terms than that at the bank. I mean, Seth, let me ask you a question because I have high with no money down because I'm covering all the closing costs, all the fees. How close to zero can you get to make this deal work for you? I can't. I need 20%. Are you going on like a nice trip or are you paying off some bills with that? I just need the money. Yeah, that could be a deal breaker, Seth, because once again, if I got to give you 20% plus closing costs and pay retail, that just doesn't make sense. So what if I said 10% there? Is that okay? 5%? 1%? Like, what does it have to be for you to say, okay, let's do it? So it really depends on the rest of the deal. Maybe, and I'll give you an example. I'll give you a real good example. We did a deal in Buffalo, New York area called Tonawanda. Exactly what I was thinking of. He has a house. He's like, hey, listen, I'm giving you a great deal. I just want 200,000 for this thing. I know it's worth a lot more. I just need to move. It doesn't owe any money on it. I said, fine. Would you be open to doing seller financing if I pay your price? He said, I would, but I need half down. I need a hundred grand down. I said, I can't do that.

We negotiated, we wiggled back and forth to $30,000 down. I have never put $30,000 down on a property ever. This was the first and only one. And the reason why, he said he's moving. He's moving to North Carolina. They want to have money for the move. They want to have money for some new furniture. And they want to have money for the rent for the new house.

So we got that number down to $30,000. The reason why that deal worked, because the house was worth $250,000. I bought it at $195,000. I did give him $30,000 down because he charged me no interest at a flat $1,000 a month payment. So now that we've owned that house, it's been six years since we bought the house. We owe maybe a hundred grand on it. But in the last six years, it's gone from a $250 value to a $350 value. So in the last six years, the value has gone up. We've paid that down. Our renters have been in there. The lady who's in there now gave us a $20,000 deposit to move in. We cashflow, I believe it's like 700 and some change a month. And we keep paying down that seller, that thousand bucks a month, every single month. So in six years, that's made us over. Well, I mean, just an equity spread alone, $250,000. That's not even including all of the cashflow and the house was turnkey.

Didn't need anything, just needed to get cleaned. But I mean, he remodeled the house, the roof, the windows, the siding, the driveway, all of it was new. He just didn't want to list it on the market because they had a lot of dogs and they didn't want people walking through their house, having a room, the dogs every single time. He's like, I don't, I just want to pack my bags and move. So for me, he did want, that's over 10% on that deal. That's like 15% down. So what I do it, I typically do not. But because of the rest of the terms on that deal, that made sense to do it. And I still didn't want to do the $30,000 because I had to do $30,000. I had to do probably $6,000 in closing costs, slap an insurance policy on there. So that's coming up with a lot of cash to get into the deal. But the rest of the deal, it was so worth it that I was like, yeah, this is crazy good. We're doing it. And he walked away like, I can't believe I got $30,000. You guys are the greatest.

So that's what it's doing. it's creating a win for him and a win for us because if he didn't list it he did not want to list it how else would he have sold it right the guy wasn't really figuring out what he's going to be able to do so this is why, every time i want to be close to zero as possible sometimes it does kill the deal sometimes the down payment is too high so in my crm, i actually have a whole column where they said yes to terms they just want too much money down, so when i'm doing my follow-up with all of these people there's that one column in particular that's okay here it is it's follow up day i'm going to reach out to everyone in this column like hey listen seth the last time we talked about um you know i'm interested in your house have you sold it yet no it's still available it hasn't sold yet, the last time we talked i mean we were close to a deal you just needed fifty thousand dollars down is there any way we could get that closer to like zero down or maybe a couple grand.

And if you're like, no, I need my 50,000 for X, Y, Z. And sometimes they legitimately do. Sometimes they're like, hey, I need this money to go buy my next house. I can't help them with that. And you got to remember, he has been studying this for a decade now. And that's why everything is so simply coming out of his mouth. But in the beginning, there are so many things. That's why it's really important to make sure that you give yourself some time to learn it because there's a lot of moving parts. Yeah. The question on what's the least you would take for the monthly payment is basically comes down to a cash flow issue, right? Like you need to see a big enough spread between that and then whatever rental income you're going to be making for the property or I guess whatever the plan is, it needs to not create too much of a drag on whatever income you're making. So like how much of a spread do you need to see? Or like what answer to that question would be too high? At what point is like, no, it's got to be this line or less. And how do you calculate that on the fly? So for me, I mean, I want a minimum cash flow of 500 typically per door. Some, we don't get that on, right? Some was a great, great property and we make 250 bucks on, right? And that's okay because I have the right renter inside my property who did give us a very large non-refundable deposit to move in.

And because they're responsible for all maintenance and repairs, if the refrigerator dies, they don't call me, they go to Home Depot and get a new one. So that 250 is actually real cashflow. And when somebody gives me 20,000 just to move in, to me, I can make that deal still work where even traditional landlords, by the time you put in management and cap X, now you're in the red and that won't work for traditional landlords. So even on some of those skinnier deals, I could still make that work. And then once again, if I'm having really great terms, really low rates, I'm going to pay down that principle really quickly. And that's, what's really important because 40% of homes are owned outright.

Those are the easiest ones to negotiate those things on. The other 60% of homes, they all have mortgages on them. Now those mortgages, I can't change their payment. So for me, if I had one, he's got a 6.8 interest rate. The payment's way too high. It does not cash flow. I'm like, I can't buy that deal at all. But when Tyler reaches out, he's got a mortgage. I can't negotiate his payment. I can't negotiate the interest rate. He's got a fixed payment of $1,883 a month at a 3.25 interest rate.

So for him it was just like what do you want for it he's like i owe this i asked the magic question seth would you sell me the house for what you owe on it if i take over the payments he's like yeah how do i do that i'm like i'll send you over a purchase and sale agreement let's talk about it work out the details so that's exactly what i did there now, on his situation he has 26 years left on his mortgage so i just wrote it up for 26 years so i have a fixed rate of 325, for the next 26 years, cash flowing property with a low interest rate in Florida that was only built in 2007, got a new roof in 22. So it's not even like some nasty junker house that we used to only look at in the beginning. So on the ones that have mortgages, if they tell me they've got a 2% rate or a 3% rate, man, you've got my attention. With the, I guess with the higher rates that we're seeing now, does that screw anything up when we're talking about buying properties subject to, or not really, it just needs to cash flow. Yeah. Because sometimes like, you know, if that interest rate's high and the payments higher than when it rents for, I can't do those deals. No deal. So the good news is half the houses that have a mortgage have an interest rate under 4%.

So there's a lot of twos and threes out there. It's yeah, it's a numbers game. The question where you're asking like, how many years can you give me before I have to cash you out? How much time is not long enough? I love 10 years and up, Honestly, I would never do anything in Florida under 10 years right now.

Yeah. I mean, I've had some that we've done for five. I've had some that we've done for seven. I don't love it, but we've got some free equity. There's one caveat. If you are going to do a smart flip, which is one of our favorite strategies that you don't have to do like all full renovation gut job, but maybe that just needs some work, and the sellers are willing to let you take over a couple months of payments, you know maybe like six to eight months just so you can kind of get it market ready and then you can list it we've done that before but you know you really want to give yourself time you want to give your renter time if you're going to use our strategy or because you need to figure out i see a lot of people that get into these deals they have two years even the other day like there's a seller that reached out to one of our community members and he's under seller financing and he's not gonna be able to buy it out and so now he's trying to figure out his options i'm like well you gotta talk to the original seller because it's, you know not necessarily the person you're talking to that's concerned at this point. Yeah. Now, when you're taking over mortgages subject to, does that ever cause problems because the originating bank doesn't allow it? So we do it with a wrap. It's very similar to subject to. There are some technical difficulties or changes there, but with a subject to, or you're doing it on a wrap, it's not against the law. It's legal. It's been legal. People have been doing this for a very long time. It's actually written right on the HUD statement, line 203 and 503 of how to do it.

So the banks are in the business of lending and making money. So what we've learned a long time ago, if you make sure that the bank is getting their payments on time, slightly early for the full amount and their asset is protected. So that means you set up your insurance the right way. So if it's insured the right way and their bank is getting their money on time, the banks don't care. They don't want to get a property back. They're not in the real estate business. They want to get on time payments on the money that they've lent out.

No different than if you lent me money and Jenn's the one paying it. You don't care as long as we're paying you back. You don't care who pays it. So that's the big thing. And I think where a lot of people mess this up is they don't have the right process. I mean, I work with one attorney who has been doing this for 30 plus years. He's done over 10,000 of these transactions. And if you look up Scott, he's got 3,700 homes that he bought this way that he currently owns. So it's the right details of how to do it. And if you know how to do it once you could get right through it. And so now anytime I talk to somebody who's got a mortgage on their house.

If you say Seth or Joe, I've got a really low interest rate and payment, but I need to sell this house. Hey, could you just sell it to me and I'll just buy it and I'll just take over your payment. And once I walk them through the why, because if I buy your house at your price with today's rates that are double, my payment goes much higher than I could rent it for. And that wouldn't make sense. But if I'm able to buy it this way and I'll connect them with my title company. I'll connect them with my attorney who knows how to walk them through the process. I want full transparency. I want full disclosures. I want them to know everything about what we're doing so they're comfortable. They could go sleep good at night and we can too. So I am very big on making sure that the seller knows what they're doing, getting into all of the ins and outs. This is a long-term relationship that we're building together. It's not a cash deal that once they get their money, they're done. I have sellers that I've talked to for years and years and years and years. And so part of this answer is make sure you're doing business with.

Awesome people right they're crazy and they got crazy things always happen in your life like is that a deal that you want to get involved with for the next 20 to 30 years where now they're crazy is trickling into your world because we've had some of those situations like yeah i like the deal but i don't, i don't know if i would want to deal with that seller for the next 10 20 years i'm very picky i only want to do great deals and that's it.

And just to clarify when you're talking about mortgage wrap just in case people are not familiar with that am i correct that that's where you're basically just making payments to the seller and the seller is continuing to make their payments to the bank, is that what that is or is there some other explanation on how that works on paper that's what it says but what we do is we just send the paper the money directly to the bank i got you i don't want to play the whole day they get it makes the payment yeah so we just get their login for their bank account information, um it just the portal for their mortgage payments all i did i'm not getting like their checking account info um and we just make sure that payment gets done we set up electronically we have to verify that their payment hasn't changed so i I want to make sure I'm sending the right amount every month. So we verify, yep, the payment doesn't change and the payments go out automatically. If you need to go in there and pull a mortgage statement, you can, the seller's still going to get their mortgage statement. So they'll see that everything's getting done right. And they're pretty happy. And we would do it with a wrap. The reason why for some of you guys don't listen or don't know the difference that are listening, that are listening, but don't know the difference. You know, it's just an extra couple of pieces of paper. It's a promissory note showing that we're making the payments. So if the buyer defaults, they could get the property back, But most importantly, Seth, these people are going to go out and buy another house They're going to go out and buy a car and the person there is going to say well this old loans on your credit report So what we do is we show them the paperwork that we bought it.

The closing statement, the wrap paperwork shows that we're making the payments and it shows us making the payments out of our checking account. So our payments, incoming payments help wipe out the debt that's on their credit. So that doesn't stop them from going to buy another house. Cause that's the one thing that comes up all the time. Like what happens if I want to buy a house in the future? I just let them know the way I do the paperwork. Um, I could show that I'm making the payment on your behalf. So that won't stop you from getting your next house unless you go like charge up your credit cards or do something crazy. Does that, it's probably more of a bank underwriter question, but does that then call into question your credit worthiness? Because that's only helpful if you're making the payments, if you can be relied upon, right? So do they start asking questions about you or does that not go that far? Motivated sellers just, they need help. They're not asking. I'm talking about the motivated sellers bank when they try to get another loan because the bank wants to see your paperwork and say, okay, payments are taken care of, but that It only matters if you're actually solvent and you will continue making payments, right? Yeah, we've never had the bank check. They just want to see that we've made the payments.

Easy peasy. I have never needed a credit check. We've got 800 credit scores over here. I've never had a seller ask me for my credit report. I've never had a credit report had to be pulled or shown or proof of income or none of that stuff. Because once again, I'm dealing with a very motivated seller who we're solving their problem. If you're drowning in the middle of the ocean, you're not going to be like, Hey, can you tell me what kind of life raft you're going to throw me before you throw it in the water? Like they just need help. But that said, it definitely takes money to run a business and to do the right thing. And success to us is a good night's sleep. So obviously being ethical and moral and making those payments come no matter what, even 2020, we had seller's mortgage payments on the line and it's COVID hits and our tenants, whether they paid us or not, I'm making those payments. Fortunately, they did pay because we have great tenants, but it does come down to that. And it's really an obligation. I feel like maybe some people don't take as seriously as they should. That's why we're pretty passionate about sharing that. Back to these four questions you're asking, you know, regarding the price, if you can do no money down or just low down payment, the least amount that they'll take. So, you know, preferably a very low payment and then a really long term that's far out there. Am I correct in understanding the answer to any one of those questions could be horrible, like a really bad answer, but...

It can be okay if the other answers are what you do want to hear. Is that right? Yes and no. If they say I'll give you six months term-wise, that's no deal for me. Or if they'll give me a really good, the rest of the term's good, but they want half down, that's a deal breaker. Or if they want like a million dollars for a $200,000 house, I'm not going to pay that. Yeah. That's the kind of thing I'm trying to uncover is like, where are the actual boundaries here? Like, say if somebody wants half down, but they sell it to you for 30% of market value. Is that okay? Or it's like, nope, sorry. Like, what are the absolutes that must be true when you're looking at those four questions? I think that's why maybe it's frustrating to you because I don't know if there is an absolute.

But you just gave me a few absolutes. Like, you just told me a few that was like, well, if they want a million bucks for this, that's a no. So, like, that sounds like an absolute to me. So, like, where are all those boundaries? So, I mean, I'll give you an example. One of our friends just did a deal in New York City. They wanted $50,000 down. Now, I don't buy with $50,000 down. They also, they didn't want to go a 20, 30-year term. they want to get cashed out pretty soon, like under a year. So big money down under a year, that is usually a deal breaker, but there's always more to the deal than just those two things. The reason why is because my friend put it under contract for 400,000. They closed on it. They bought it. There's more to the story, which are going to break into. They gave that seller the $50,000 down so they can move on and go do what they need to do. Now my, my friend bought it, closed on it, they put $3,000 in renovations in it because they knew it was a $500,000 property that they were getting for $400,000 and it only needed $3,000 worth of some small stuff. They list it on the market at $499 and it goes over asking and they get $575,000.

So on that deal there, yeah, that normally wouldn't work. That wouldn't work because they want under a year of payments and they want a big money down. But because they had such an extreme discount, then they can make that deal work. So there are some things that I'm always really big on. Like the deal has to make sense to me as the buyer. I have to figure out a way that's going to be a win, not just for the seller. It's got to be a win for us, the buyer. So maybe that is a really big discount, but they do need some money up front. Right. Or maybe there is no discount. They want full price.

And there's a ways we can navigate around that. And so this is what is interesting because it's hard to.

No deals ever the same. There's four different levers of negotiating on these deals. So a lot of the deals that I'm doing, the ones that I love are the ones with very little money down. I do have some type of free equity. Most importantly, I'm cash flowing because if I'm going to buy a property, I'm not going to buy a property. I don't cashflow once again, unless I'm getting some extreme discount. So when we call it creative finance for a reason, because there's.

This is the first time in my life where we've been able to control the pen and not just walk into the bank and say, what do I qualify for? You qualify for this much money. This is your interest rate. We need your 20% down and here's your closing costs. And now I have to go find some property that fits in that little box. And that's what we've always been taught until we realize that we can control the pen. Seth, I've had a deal that we did. I had no payments for six months to the seller. A bank's never going to let you do that. But I said, Hey, listen, if we do the deal. My first payment is not going to start for six months. And they said, why is that? I said, well, usually the bank gives you a few and I'm going to do a couple of things to the property before I get it rent ready. So if that works for you and I pay your price, my first payment won't be due till and we told them the date. And they're like, yeah, that's fine. So there's some wiggle there with negotiating. And that's what I love about it. I agree. I think it's a beautiful thing just to see how many different ways you can package this thing up to work. But it gets back to my original question, trying to figure out absolutes. It sounds like, and again, you didn't say this, I'm just saying this so correct if I'm wrong, but it sounds like there are no absolutes as long as the other things can accommodate it. For example, somebody could say, I need $50,000 down, which is half of the total price I'm asking for, but the property is worth a million bucks.

So it's like, well, maybe that is okay. Normally we know, but yes. And I realize these are ridiculous situations that probably don't happen, but it sounds like the answer to any one question could sound terrible. As long as the others can fill in the gaps, it can still work. I don't think I can say that under myself.

Yeah, I think you're spot on. There are no absolutes. The one absolute is it's gotta be a great deal for the buyer, which is us, or anybody else listening, right? You have to buy real estate to make it win. How many times do you see people doing a fix and flip and they lose all this money? Or how many landlords are being a landlord, but after you really do net, net, net, you're not making any money. It's great to say you have all these doors. I know a lot of friends that have a lot of doors. They brag about it on social media, but then you look at their P&L and they're not making any money.

And so the whole point of real estate is you got to make money while doing it. And if a real estate doesn't pay me every single month for owning it, that's typically to me is that deal breaker. I need to make money every single month. I need to see that this is a good investment. I'm an investor. I'm investing in this property. So something has got to be a really good win for me. And sometimes too, Seth, out of the four different negotiations, sometimes the seller wins on their price. Right. But I went on the other three or sometimes they won on their price and their term length. I want my price and I want to get cashed out in 10 years, right? But I got no money down and I got a rocking good payment. So these are the, some of the things where I check out my four. I'm like, okay, which one did they win? Which ones are we winning on together? This is a win for everybody. And that's what I like. So I think that's the neat thing about it. But plus also having multiple exit strategies also make the ability to do more deals. Once again, like I was mentioning earlier with a lease option, my renters are giving me 10, 20, 30,000 to move in. But if the cashflow is a little bit tighter, but I'm not having to pay for management and CapEx because they're handling all of that. And they did give me 20,000 move in some of these deals I could squeeze out where most other people just would never even do. So there are some.

There's no absolutes, but the only one, I think, you got to make money when doing it. Are you taking title to these properties at closing? Or is it like a lease option or a land contract where you don't actually get title until you pay the thing off?

We get title at closing. If I'm an educated seller and I'm being asked this question, one of the questions in my mind is like, well, what if you stop making payments to me? What then? So is it up to the seller to like figure that out on your own? Yeah. Lawyer up and come after me. Like, is that kind of or how do you explain that part to them? if they have that objection. Yeah. And that does come up sometimes. How do I know you're going to make the payment? Well, I had to pay thousands of dollars in closing costs and fees and insurance to get into the deal. And I don't want to mess up this deal because I've got a two or a 3% interest rate. This is an investment. And I would lose all of that if I stopped making my payments. And inside of the note, that's why I like a wrap much more than subject to. Because if somebody does subject to, which they're very similar, subject to, they're just giving you the deed to the property. There's nothing to say they could get it back if you stop paying. There's nothing. With a note inside of the wrap that we do, it actually costs us a little bit more money to do it this way. But because of the note, it says if we default, they could get the property back. So this is why it does cost us a little bit more money. I did not figure this out on my own. I've worked with some of the best coaches and trainers and legal advice across the country over the last 25 years to make sure that we cross every T and dot every I the proper way to not only just protect us, but it's most importantly to protect my seller. Protect them if the buyer defaults, whether it's us or anybody else. Protect them if they need to go get a house or a car later on. I don't want to do it subject to.

Where now that debt is on their credit and they don't have a note showing that anybody's making the payments. And now that hurts their debt to income.

Right? So what I've learned from the absolute masters of Mount Rushmore, we talk about like Ron LeGrand and Carlton Sheets. These guys have been doing since the eighties and the guys that they've been learning from are doing it since the fifties.

So Jack Miller was one of the first guys really doing it since the 1950s. So when you look up this, there's always a right way and a wrong way to do just about anything. Right. And this business is, your reputation will be on the line. And there's never one deal that's worth risking your name and reputation because you're in this industry. I'm sure you've heard of some people who had a really popular name and then something happens. And now everybody will start looking at them a little bit differently. I don't think you'd want to do business with those people. So reputation is the most important thing. So the fact that we've never missed a mortgage payment, we've always taken great care of the properties. We've helped sellers out. And sometimes, you know what? We've been in some sticky situations, right? We had a fire at one of my properties. My renter left the pan of bacon on the stove. And so thank goodness we had the right insurance that even covered full replacement and loss of rent. So while our insurance company was going through the property and we had contractors for seven months redoing everything in the property, we were still collecting rent. We were still making the payments. We were still doing all the things. So it's really setting up your business for success and not shortcutting it. I think where most people get it wrong is they watch some YouTube videos and they're like, oh, I'm going to go out and do this now. I've seen this on YouTube, but I would never go to a doctor that learned on YouTube. I would need to go to a doctor who's actually gone through certification and process of learning how to be the best in their field. And just like that, not all doctors are great.

Right? So you need to make sure that you do the best you can. You do not need money to buy real estate, but you do need money to run a business. So having capital is key. Back to the original question. So if a seller is like, hey, what's the risk of you stop paying me? And if they don't buy the whole thing, you say, well, I don't want to mess up this investment. I got a good interest rate. Like if they don't care, they want assurances that things are going to be okay, or they have the right actions to go through. The answer to that question is what? because you put the note in the wrap that makes it okay? Or like, what do you tell them about? Like, here's how you can get your property back if I stop paying you. Is there a line for that? I just tell them the way the paperwork is made and drawn. If we stop making the payments, it's legally you can get your property back. Do they have to go through court or something? Or like, how difficult is that for them? I mean, it depends on the buyer. Yeah, it really depends. Right.

I mean, if a buyer- Buyer's you though, right? Yeah, if it ever happened to me, I would never default on payments. But say a buyer and anybody else would, you could deed them the property back if you didn't want to go fight it out in court or they could go fight it out in court. It depends on what they want to do. But legally, they'll get the property back if the note's done right. So you would just deed the property back if that happened? Oh, yeah. I've had a property where in New York, the guy was going through a divorce, said yes to terms. Please, please, please come help me. My mortgage is late. My ex-wife is kicked me out of the house and now I can't deal with this. So we bought it. We cleaned it all up. We rented it out for years. And then he came back and said, I want my property back. The mortgage was still in his name. I didn't even fight him about it. I had my lawyer look at the stuff and my lawyer's like, you don't have to give him the property back. I said, you know what though? I'm only making 300 bucks a month, giving the property back.

If he takes care of all the legal fees and he did happen one time. And you know what? This is why when you're in a long-term relationship with a seller, you want to make sure that the seller you're helping them, but that's a long-term relationship. So you need to make sure that you're continually on the same page for a very long time sometimes. And so Tyler, I did a deal with him for 26 years. I said, Tyler, this loan's going to be in your name for the next 26 years. You're a young guy. I'm a young guy. We're going to be together for a long time, but are you good with this? And he said, yes. Case closed. But does that ever become kind of like a messy divorce situation where it's like things seemed great when you got married, when you got in this deal with the seller, but like years go by, things fall apart, they change, you change, I don't know, something goes horribly wrong. Are there ever moments where it's like, man, I hate being in a long-term relationship with this seller? And what do you do about it? Gave Larry the property back. Yeah, gave him his property back. Gave it back. Is that the only time that's ever happened? It comes down to like, do you want to deal with the stress and aggravation or do you want to just give him his property back and go make more money and help more people that actually want the help? Do you need to make money in order to do that? Or is there a time where it's like, man, I'm going to lose a ton of money doing this, but I can't stand this person. Let's just cut and run. No, all of our people, because here's the nice thing about being self-employed. I only do business with people that I want to do business with. Simple.

Everything is done legally, all by attorneys. They have everything checked out on their end. We have everything checked out on our end. So yeah, people's times could change, but we're going to continue to stick to our end of the bargain. Our side is never going to change. Like we're going to do what we said. Are we going to buy it? We're going to make the payments on time. And that's what we do. And, you know, and once again, you get some people who I think of one, we bought his house. He said, hey, I'm going to buy my new house. He did. And they said, hey, I'm moving. The bank needs to show that you bought my house. So we had to show his new lender that we bought the house, all the paperwork. And then he said, OK, I'm never moving again. And then he moves again. And so we had to go through the process again. But he was great to deal with. And that's the key to this is, you know, when you're helping people and you're truly helping people and you're helping great people, you know, this is what I like to sleep good at night on.

When you are, we'll call it, dating a potential seller to possibly get into one of these deals with them, what are some potential red flags they could say or do that would make you say, hey, everything about the numbers of this deal looks great, but no, I'm not going to deal with this person. If they're saying all the right answers to those four questions, but like they make a comment or exhibit some behavior, you ever had that where it's like you saw a deal that looked good, but you said no anyway, because of some thing they did or said. Yeah, I'm filing for bankruptcy next week and I'm trying to skirt around it. They're trying to do something illegal. I won't do anything about that. I won't even touch it. I've had people who want to forge their ex-wife's name on something or even try to do it, actually did it. Yeah. I mean, we've done a ton of deals over the last 25 years and there's been more- People are going to people. People are going to people. We could write a whole book on stuff like that. You will be. I mean, I've had a lady who sold a guy's house, which we didn't even know. We're under contract going to buy it. And she just broke into the person's house. There were squatters. She said that she lived there. She owned it. I pulled it up in county records.

She was the owner. Well, because she went and had a quitclaim filed with a county that was all forged and fake notary. And so she legitimately stole this guy's house. So there's all types of stuff that you'll come across. We had the other one too, where the title company called you up and said, absolutely not. Don't do this deal because something was weird with the kids inheriting the home. Yeah. The house was in the kid's name and they were spending all the parents' money. I had one situation where they'll do seller financing, but we had agreed the husband to stop cheating on the wife. And I'm like, like, no, I don't want to have the Bluntstown Batman.

So, yeah, we've had all types of really wild situations. But when you talk to thousands of people every year like we do, and you're talking to a lot of different situations all around the country, you just run into so many things. And, you know, I like to say people are good and most people are really just good people. But there are some shady people out there, too, who are just doing some unscrupulous things that I will have no part of. I'm not going to jail over a deal. There ain't no one deal ever worth it. And I don't want to go to court over it. I don't want to be like, oh my gosh, we didn't know. The key is having really great attorneys, really great title companies who are very thorough. And I think that's been a real big key, but then also having conversations with people, real conversations with real people, find out what's going on behind the scenes. And if they're going to open up, I mean, you would not believe some of the things that I've heard. I don't even want to share them on your show because you'd be grossed out.

But yeah, people will tell you stuff. You just got to listen and, you know, sometimes be a better listener than you are a talker. One thing I should mention here, just because it's highly relevant to what we're talking about. So something that I find really helpful is having a calculator that can very quickly on the fly as you're talking with somebody, figure out what payments are going to be. Or say, if you understand what the payment needs to be and the term and the interest rate, but you don't know what inappropriate price should be based on that stuff. Like you got the four different variables. You need to know the missing one. I made a universal loan calculator. You can find it at universalloancalculator.com where you can just put these, any of the three of the four variables in and then calculate the missing one. It'll create a whole amortization schedule for you. So if you ever talk with somebody on the fly, it's a super helpful tool to have for that. That's awesome. A couple more questions. I know we're going long here, but this is great information. I know one of the big struggles with trying to make this strategy work is, as we talked about at the beginning, just finding motivated sellers who will say yes to the right terms, and you can actually do the deal with them. So I'm curious, since you know how to have these conversations so well, and you've got the system figured out, what percentage of the time do people say, yes, let's do this, and you can actually close a deal? Like if you're talking to 100 different people, if somebody is doing everything right, what's a realistic expectation of the percentage of people that say, yep, let's do it. If they're a true motivated seller, and I'm talking like eights, nines and tens, you're talking one out of 25, one out of 30.

If you're talking like just the broad number where you're scattering everybody all in there, it might take you one out of a hundred.

You might have to talk to a hundred people who are like, I'm in no hurry to sell. I just want to know what your price is. And I don't even think I want to sell, but maybe I consider in 2028, if you incorporate all of them in there with the motivated sellers, you probably have to talk to a hundred people. If you squeeze all of that down to just like true motivated people, one out of 20, one out of 30, it'll get you your number. And that's once you know what you're doing. Yeah. Sure. And not being changing the process. If you ever watched the movie, the founder, Ray Kroc talk about how they built McDonald's. Like they're very big on process. So they don't make the best hamburger or cheeseburger. They sell the most of them because they have an amazing brand and process. So we brand ourself the right way on social media. And then we have a right process. They will help get people through, ask them some couple easy peasy questions, get only the right ones on the phone. So I'm not talking to every lead. If I got 20 leads today, I'd be on the phone all day. I don't have time for that. But if I got 20 leads and four of them are the good ones, I'm only going to talk to those four good ones 10 minute calls I'm on and off in 45 minutes between all of that and if you talk to 20 to 30 motivated sellers.

Doesn't matter if it's a month or whatever that is, that's your key. And so guiding them or gauging on how motivated are they based on their situation. But your conversions are really simple when you're dealing with motivated people. So where it gets frustrating is when you're talking to a lot of just not motivated people in no hurry. You just pull a random list. Yeah, good luck. Yeah.

On that whole point of process. So I know earlier in this conversation, you were talking about how, you know, if a deal doesn't come to fruition on that first call, you follow up a month later. or 90 days later, whatever it is. What is your process? Do you follow up every week or month? What are you putting in your CRM to trigger you? Hey, you got to call this person again, see if they want to sell now. So it depends on a few things. If they're a hot, like motivated lead and then what's their timeframe. If somebody's like, hey, I want to sell now, I might be talking to them a few times a week, following up with them a few times a week. If they say I'm going to be selling in the next like 90 days, it's going to be once a week. If they're not selling anytime soon, it's once a month and it's all done by automation. I'm not calling them all once a month. We'll set up in my CRM. We'll have a drip campaign and I'll start bringing them back down to like, Hey Seth, I know that we talked a few months ago. Are you getting closer to wanting to sell? And if you're like, yes, now it's happening. And the key is too, it's continually being in front of them because regardless if they're responding back to you or not, they're still getting your emails. They're still getting your text messages. They're still getting your voicemails if you're going to call and leave a voicemail so don't stop that's the key i think a lot of times like oh i've tried them three times they didn't answer so i'm just going to give up like don't stop i mean i've had deals where it took a year and a half of follow-up.

And they finally like, yes, I'm ready now. And so that's why I think trying to do everything manually on your own will work in the beginning until you start really building a business around it. And then in the beginning, it was like me and sticky notes, like those little yellow sticky notes. And that's what I did at the beginning. Now I've got a full fledged CRM so I could gauge them on their motivation, put them in the right campaign and it will follow up for me. And then like, Hey, guess what? Seth just came back and he says, no, he wants to sell next month. And I'm like, great, let's get on that call. And that's what it really boils down to. And if you're tracking your KPIs, your key performance indicators, and you're making sure you're able to make X amount of calls per day, and you're talking to X amount of motivated sellers per week, you could actually start forecasting your business. So if you want to do a couple of deals a month, it's not overly hard. With these follow-up messages you're sending, like, are they literal texts? Or is it like a response to the original DM conversation you had? Or, and what exactly are you saying? Is it just like a one sentence? Hey, anything new? Is that it? It depends, right? Depends on which pipeline they're in. It depends on it goes into my crm and then my crm will follow up with them usually either text or an email because i'll be like hey listen let's get on a call um send me your phone number then i'll put it in my crm did you have a good email address load that in my crm so now they're just getting messages emails and text messages, joe and jen it's been awesome talking to you if people want to follow up with you check out whatever you got going on do they follow you on facebook or something or where should they go if they want to learn more.

Yeah, absolutely. I'm both Facebook. Instagram is my favorite, Jenn DelleFave. And I'm Joe DelleFave on Facebook, but also too on our YouTube channel. We're sharing all of these things. We're sharing deals. We're showing closings, HUD statements, interviews with people.

I mean, actually property walkthrough. So creativefinanceplaybook.com, but you got the note right here, but on our YouTube channel, creative finance playbook, this is where we peel back the curtain. So if you want to see like real deals, I think that's how you found us. Or we're looking up, so people will look you up regardless if you're going to be buying their house or any of these things. So on YouTube is where we love to share a ton of our stuff. And I'll be sure to include links to all that stuff and a number of other things we talked about and the universal loan calculator and the show notes, which is retipster.com forward slash 282. Again, Joe and Jenn, great to talk to you and all the listeners out there. We will talk to you next time.