What is Seller Finance? Creative Real Estate Explained

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Жыл бұрын

I’ve told my famous F-150 story about 1,000 times (that’s why it’s famous). But what exactly is seller finance and how can you use it to build out your real estate portfolio? Watch this training - creative real estate explained - to learn how you can buy anything with creative finance…
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❎ I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a KZfaq video for entertainment purposes ONLY ❎

Пікірлер: 426

@natoreezelai4756 Жыл бұрын

Yoooo! This is EXACTLY what I’ve been needing to learn! Thank you! 🙌🏾🙏🏾💪🏾

@ezequielarce8079 Жыл бұрын

Just came across your content, it amazes me how you don’t put money down. I’m over here trying to save up $40k to put down 20% down for a rental property that I will like to purchase this year if possible. I’m currently informing myself through KZfaq. I have not graduated from KZfaq yet 😂 … will keep on watching your content and see what happens.

@ezequielarce8079 Жыл бұрын

I was listening to Biggerpockets and this other groups and all I hear is for your second property is 20% down so that’s where I get my 40k number from…

@lild9193 Жыл бұрын

instead of trying to “SAVE UP 40K” you could always use business credit to fund it especially if it’s going to be generating passive income.

@HTSS8 3 ай бұрын

YT University is riddled with ignorant and deceptive and greedy "teachers/professors", just like this guy pace. Stop being the textbook naive viewer. Pace is the textbook lazy man and selfish greedy slippery salesman. The F150 Story is a age old Sales Mantra of "Facts Tell, Stories SELL"

@BrettMaverick 2 ай бұрын

Does this only work i they've already paid off the house? Cause usually they're relying on the big payment to pay back the bank

@PaceMorby 2 ай бұрын

Yes seller finance is when there's no existing debt - everything is paid off

@matchlessmaintenanceandmor9509 Жыл бұрын

MAN COME ON BROTHER ❤❤❤ LOVE THIS!!! I CAN ACTUALLY FOLLOW AND UNDERSTAND YOU…. THANK YOU SO MUCH

@HollywoodWestern Жыл бұрын

Awesome example of seller financing, though I wished it was always as good as this example

@Majsayy Жыл бұрын

Thanks for this video bro! Great break down!

@kimanderson9853 Жыл бұрын

Right on. Thank you for sharing.

@theluckshow9617 Жыл бұрын

Pace I like your style. Priceless information.

@PaceMorby Жыл бұрын

I appreciate that bro!

@ThePedrosantos23 Жыл бұрын

Pretty powerful stuff thank you

@ricky433 Жыл бұрын

This is amazing 🔥

@theinvestortanner 20 күн бұрын

Great explanation on creative finance and seller financing! I love how you used the F-150 story to make the concept relatable. It's crucial for sellers to understand that they don't always need to settle for lowball offers if they can find buyers willing to structure deals creatively

@PaceMorby 20 күн бұрын

Exactly

@juliagreenNorCal Жыл бұрын

Love this story! I'm sending this to agent friends to expand their minds.

@PaceMorby Жыл бұрын

Awesome!!

@zeekflash6924 Жыл бұрын

How do you structure deal , in case buyer is delinquent on payments , like 3 months late repossess car ? Or stipulation and conditions ? Thx

@TruthTraining1130 4 ай бұрын

Dope content my brother. Came at the perfect time. #GodsWork

@akilaliyanage Жыл бұрын

I want to learn to tell stories like you. Great skill!

@PaceMorby Жыл бұрын

You can do it!

@igisvlogs Жыл бұрын

Love it 😍

@jearomanis Жыл бұрын

💥💥 fire Pace 🔥🔥

@oliviahall8639 Жыл бұрын

Pace you're a HONEST GENIUS my friend ✌🏽️🐊

@PaceMorby Жыл бұрын

I appreciate that

@shtingstar1699 Жыл бұрын

I'm loving it

@thanghuynh2283 Жыл бұрын

Wow. You just blew my mind. Learn so much in 18 min video. Thanks

@TheDealDiva Жыл бұрын

always appreciate the value you bring!

@PaceMorby Жыл бұрын

Hey Samara! My pleasure!

@centralfloridalivinghenryl6127 Жыл бұрын

Love your content brother! I was Able to make $20,000 last week with creative Financing.

@PaceMorby Жыл бұрын

Henry. That's dope!!!

@PatrickWiscombe Жыл бұрын

Absolutely brilliant!

@PaceMorby Жыл бұрын

Thanks Patrick!

@MatthewPotter-gi4fp Жыл бұрын

great vid!!

@Keithprestige 9 ай бұрын

This was so helpful

@PaceMorby 9 ай бұрын

Glad you like it!

@Reshape9 10 ай бұрын

Pace you changed the game!

@user-ml3qg2uf7c 6 ай бұрын

I appreciate the content. I do have one question. How is the "wholesaler" that brought you the deal paid?

@deesplash7087 Жыл бұрын

This dude is goated 🙌🏽

@PaceMorby Жыл бұрын

Thank you bro!

@shawnmccalmon8469 4 ай бұрын

Great video Pace

@PaceMorby 4 ай бұрын

Appreciate it!

@gordoodrog4683 4 ай бұрын

Susan got hosed!

@PaceMorby Ай бұрын

LOL you are obviously not in real estate.

@justadrum Ай бұрын

@@PaceMorby nah bro, you gotta own this one..Susan got had, if Susan exist at all 😂 Why would she sell to you only to wait weeks/months for you to collect 4-5x more than what your paying her? At that point I’d imagine she’d list it on Airbnb herself. But your video was very well edited 💯

@heavyizthacrown-5842 Ай бұрын

@@justadrumPoint is she wants to sell. She wants to sell and travel, nobody is biting on her $110k price, he (in exchange for 6 months grace period, her paying closing fees, and the ability to make payments) buys her property for her asking price + $10,000. She charged him $10k for accepting payments, no problem because he actually isn’t “paying” anything, the rental income covers the payments and then some. Everybody wins!

@JalenDRichards Ай бұрын

@@justadrum Susan doesn’t exist that’s the point. Bro is clearly blowing smoke all over in the form of glitter and BS

@JamesJordanbestnetworkeralive Жыл бұрын

So what’s your approach when you’re dealing with commercial when it comes to seller financing.

@anthonyseidita1809 7 ай бұрын

Legend has it he’s still talking

@magma9138 9 ай бұрын

Bravo!!

@phirijo Жыл бұрын

Do you still get title and deed at time of closing, and are you able to refinance before paying Susan off?

@vanguard7489 4 ай бұрын

but how do you wrap the deal in the contract what clause do I need to write or what should be there that doesnt affect anybody ?

@TheRealSTATIK0318 Жыл бұрын

Really appreciate you

@PaceMorby Жыл бұрын

Appreciate you more!!

@Bentam64 Жыл бұрын

EXCELLENT

@EasyCapitalArsh Жыл бұрын

This man and his creative financing tips are about to make me a fucking multi millionaire

@mayank1 Жыл бұрын

Hey I have a question about this, how do you get someone to trust you when doing seller financing because the thing I can't still understand is why would they trust you to make payments and pay off the whole house. Also could you please explain what would entail in a contract when doing seller financing or maybe give a sample contract to make it easier for us to understand the exact terms.

@9thebigcool Жыл бұрын

The thing is either they can A put a lien on the property or you can have a part in the contract saying that you will do arbitration for any case where you dont make payments.

@pacedeli24 4 сағат бұрын

Pace you are a good teacher

@PaceMorby 3 сағат бұрын

Thanks I try

@vanessatorre2888 Жыл бұрын

G status babyyyy🤑✌️

@RobertHasty Жыл бұрын

That's bad ass man.

@abeldasilva90 Жыл бұрын

Simply genius!

@PaceMorby Жыл бұрын

Abel. Thank you!

@johngleue 6 ай бұрын

Pace, could you say how often you get a seller willing to do principle only payments at such low prices? It just sounds too good to be true. And the F150 story only works if she doesn't catch on that the guy actually paid 3 times your blue book price. Shouldn't she, by the same logic, ask you for 3x her house around 300k? You paid 110k for a home that, by the time it's paid for, will have probably appreciated to be worth double that price.

@ThreeBelvedere 2 ай бұрын

She can ask for 3 times but if the only person willing to pay what you want is at your number and it’s not worth your number do you take the loss and sit on it and keep getting low balled and never get a good sale even close to wat u want or do u raise it and never sell it just because it’s a contract for 10 years don’t mean it will take that long to pay in full if you need to sell it u get rid of the property

@ThreeBelvedere 2 ай бұрын

She gets the 10k down payment plus a monthly payment also from month 1 by month 6 she already collected $7250 by the first yr she already made almoast 15k not just the 10k for the down payment

@johngleue 2 ай бұрын

What in the world are you talking about? $375/mo is what agreed to pay her. That's $4500 a year. @ThreeBelvedere

@johngleue 2 ай бұрын

He paid her down payment with the cash flow he got from the property. He said it cash flows 1k. Which is insanely good. So he walks into a deal where he pays nothing but closing costs, makes 1k a month, and pays her at the end of 6 months 5k. He does that twice to get her 10k. So he's out of pocket his monthly payments of 375/mo for the first year, which is 4500, and closing costs for a cash flowing property. I'm skeptical that this story is real, is what I'm saying. When she's fully paid back, her home will have appreciated double, and she was already cash flowing like crazy so she could've hired a property manager or just found a way better deal for herself.

@johngleue 2 ай бұрын

@ThreeBelvedere how you would ACTUALLY come to with the monthly payment is dictated by the rent that you think the property can confidently accrue. You typically want to cash flow at least $300/mo. This example Pace gives on how to figure out the payment is not practical it's anecdotal and, as far as I'm concerned, a lie.

@Hamter342 9 ай бұрын

You are awesome

@Wordskies7 Жыл бұрын

8:09 “Susan, I am crazy, just like you, I’m belligerent. I want a specific price” LOL #saleshumor

@JoshKnightMusic Жыл бұрын

Hey man! I’m a bit confused with loan servicing and was wondering if you could explain a bit? I saw your video with Robuilt and was following along until the loan servicing came up. Who takes over the loan payments from the previous owner once you have the deed? You or the loan servicer or the previous owner? Or is it that the previous owner still makes payments collected by the loan servicer (not you) but the loan servicer then takes a percentage to manage the and collect the previous owners payments? When you say you “hired the loan servicer” what does that mean. Thank you so much!!

@johngleue 6 ай бұрын

Our title company services the loan on our subtos and handles all that for a $25 fee.

@estateproperties4754 Жыл бұрын

Does this strategy works better for off market or on market?

@ShyiteimaihCarter Жыл бұрын

So if i buy the house seller financing and im paying the previous ownwer do i have to pay anyone else? After deal is closed?

@royaltyestateinvestments Жыл бұрын

I don't have any liquid at the moment but have an opportunity to acquire a single family for under $20k. How should I set up a seller finance deal with this?

@jedprater4737 Жыл бұрын

Does anyone know of these methods being used here in Australia?

@518allday1 Жыл бұрын

Does anyone know the best way to structure the monthly price you pay the seller? I know spaces example was great but is it best to find a pain point with that number or just use a number that works best for myself?

@Chrisbrownthebusinessman Жыл бұрын

Amorazation calculator

@annettewebster982 9 ай бұрын

You want to consider this, you must have cash flow after everything is considered like taxes, insurance , 5% for small repairs, 5% for vacancy, 15-20% for capital expenditures and potentially even interest if that's part of the agreement

@werentnyc Жыл бұрын

My understanding about seller financing is that there should an interest rate for the loan / mortgage just like the bank. In this case if Susan is not charging any interest (principal only) then what is her benefit in this entire deal? Rather she should have hired a realtor and sell her property and get the money at once, don't you think so?

@bobcatgaze 10 ай бұрын

Its either sold at 50k at "whatever"% interest that leads up to about 110k anyway, or she just takes the 0% interest with 110k principal. But here's the kicker... That 50k that it would be sold for? The extra interest goes to the LENDER... NOT her. By doing it with 0% interest, she MADE an extra 60k (or whatever the interest projection would end up being) on the mortgage she financed that would have normally gone to the bank. And nobody else is gonna buy it at 110k with interest. Win/win.

@bobcatgaze 10 ай бұрын

Well, except for the lender of course, he's out of a job...

@scottw.6609 Жыл бұрын

Fire 🔥

@scottw.6609 Жыл бұрын

Can I text from my messages or should I use Whas app?

@jessereck7259 Жыл бұрын

@@scottw.6609 fake, that’s not Pace.

@juquendo 29 күн бұрын

This is great explanation for seller (creative) finance. I am assuming if she did not have it paid off, the payment would be for the payment amount?

@albinothug Жыл бұрын

Phenomenal

@PaceMorby Жыл бұрын

Thank you brother!!

@Lyfeastrey 3 ай бұрын

Poor Susan. Would’ve made more money hiring a property manager. Still would’ve made $800+ a month.

@elbincollado6989 Ай бұрын

how can the buyer get new mortgage to pay off (balloon) the seller, if they only have a deed a trust?

@jackcohen9307 Жыл бұрын

it all sound great but who owns the home title and deed ? PLEASE ANYONE LET ME KNOW TO UNDERSTAND LOVE YOU ALL GUYS

@DiqaunColeman Жыл бұрын

This hit different Pace! Such a great educator!

@FastTrackIntensiveSpanish2.0 8 ай бұрын

I'm speechless... you are amazing! Thank you for your content!

@PaceMorby 8 ай бұрын

Glad you enjoy it!

@manuvns Жыл бұрын

How do i structure Seller Financing if i have a mortgage on rental property ? ( i am the seller with mortgage)

@aylinurgun5244 Жыл бұрын

So how seller trust to buyer, what kind agreement involves, sign paper and notarized? What if buyer dies etc? Do you take property back, any insurance? Or just limbo?

@somethowawayhandle Жыл бұрын

What if they default on the payment? What is the legal recourse, if any?

@frosty129 11 ай бұрын

The owner legally takes back the house. All the payments + down payment would be total loss for the defaulting buyer, while seller only wins in this situation. Similar story in a lease option. If the buyer/renter default on their obligation, the owner reclaims the asset.

@pwdadeputy5767 Жыл бұрын

When does closing normally happen on a deal like this?

@realestatemanzo Жыл бұрын

Always bringing value and your demeanor explaining/telling stories is incredible! What I'm trying too wrap my head around, in this case Susan or any seller in Susan's shoes, won't receive the full amount of $110,000, until its paid off in over 20 years..

@jalabi99 Жыл бұрын

_What I'm trying too wrap my head around, in this case Susan or any seller in Susan's shoes, won't receive the full amount of $110,000, until its paid off in over 20 years_ All you need to do is make sure ahead of time that Susan would be fine with that. Since Susan and you negotiated what she wants out of the deal, then she would be fine with that. Nothing stops you five years into the deal from doing a refinance with a community bank and paying off the balance that you owe to Susan at once (a "balloon payment"). It's all in what you negotiated.

@realestatemanzo Жыл бұрын

@@jalabi99got it! Its all in what you negotiate with the client. Anything is negotiable to work in favor of both parties. I appreciate your feedback!

@vincentengongoro2705 Жыл бұрын

The reason you can't get your head around it is because its not possible to do..

@jonlehidaduya942 11 ай бұрын

@@jalabi99 dang! 100,000 balance divided by 375 monthly = 22years and 2 months! and a net cash inflow of $625 a month! WOOOOOOOOOOOOW!!!!!! was that really what happened??????????/

@paulpowell8350 9 ай бұрын

yea... I am confuse as well. I get the overall method of how seller's finance this work, so thank alot for conveying the message; well appreciate! But number wise i don't see why Susan would agree to $375/month when she is cash flowing $1000 or more (depending on whether she has a mortgage or not). With these numbers she would be better living off the cash flow from the renters and allow her house to continue appreciating in value.

@kashfortheking 10 ай бұрын

It’s hard to believe she would’ve let the house go without any skin in the game upfront from you. Mazel tov 🍾

@williamcutt9271 Жыл бұрын

Does anyone know where to find a truck using creative finance?

@CarolWhitaker Жыл бұрын

Brilliant. When does Susan get paid off in full? Thanks for all you do! You’re awesome! ✌🏽

@NAUTILYFE Жыл бұрын

Most seller financing deals (at least on the commercial side dealing with savvy sellers) will have a ballon payment due at some point (5 years, 10 years, 15, 30 etc) though that isn’t a requirement. For us, (not associated with Pace) we typically kick it out 5 years minimum allowing for market appreciation and equity to be built up so we can then refinance (either private money or from a conventional lender) pay the seller the outstanding balance owed, and roll the cash equity we pull out into another deal.

@gregburnette298 Ай бұрын

This sounds like a rental agreement. Do they not still retain of the property untill paid in full?

@lou-fredbautista1405 4 ай бұрын

since your seller is up there in age, what happens when she passes? how long is the term for you to pay off the remaining balance?

@slikio9965 3 ай бұрын

Love how you explain that pace! Really makes sense👍🏽

@realtorsamanthagalvin211 Жыл бұрын

@Pace Morby, do you have a video to send to sellers?

@realtorsamanthagalvin211 Жыл бұрын

PaceMorby

@dakotajames5562 Жыл бұрын

How do you protect yourself from them not paying you on the payments and they still have your car? Or house? Or thing… that they seller financed.

@Chris-wk8nu 11 ай бұрын

It how do you hold the buyer accountable and when does the seller transfer the title??

@brendandavis200 3 ай бұрын

Where can I find how this looks on paper at?

@arvindg2871 Күн бұрын

Hi , can the seller financing work in Canada, as the cost of the houses are running close yo a million canadian dollars. I'm not sure anyone can do the creative financing in Canadian real estate . Any insight is very much useful here

@patrapper7367 Жыл бұрын

And there's lots of time work and energy to get to someone who finally agrees to all this for a small amount does it work yes however it's a lot of work and you can only do that after you're making a lot of money and have time to do this all day long

@JoseGarcia-vj9vh 8 ай бұрын

How does the AFR (Acceptable Federal Rates) work when structuring below the IRS acceptable interest rate? Right now the IRS has it set at about 4.3% and I have my offer to the seller at 2% interest. He is asking if he will run into any gift tax issues or etc. ??

@chucklakes2345 5 ай бұрын

What is needed to make this deal legally binding? What if the tenants can’t make payments and therefore you can’t make your payments to the seller? How does each party protect themselves?

@lucaszelnio8917 9 ай бұрын

Pace, I love the content. Last week I just got under contract on a 300k house via VA loan assumption. 3.25% interest rate, no pmi, 6% down payment, on market longer than 90days. Low interest rates are such an amazing opportunity right now. I will be saving 1000/month on my payment. I will also get 4times as much principal pay down. Keep the grind eventually someone will say yes!

@PaceMorby 9 ай бұрын

Nice work! Keep going brother!

@jamescc2010 Жыл бұрын

How do you ask a seller to do owner finance, any rejections you need to overcome? I guess more seller will not think you are serious with no money down, no skin in the game.

@Selfunraveled 8 ай бұрын

Yes… but… what about a seller that needs the full amount upfront and can’t wait for payments? It doesn’t apply to everyone , only if you come across someone who is not in a rush to get the amount they want

@Evaultfinancial Жыл бұрын

What happens if they don't fulfill the obligation of the full amount? Wouldn't that be a loss on the truck deal? ❤

@callmedrip_ 8 ай бұрын

holyyy this is crazy 😏

@PaceMorby 8 ай бұрын

Right?! It really opens up your world when you start learning creative finance.

@savatyreutov4329 Жыл бұрын

What does the seller do with his or her real estate agent in this scenario, or will this only work with a for sale by owner?

@samueljohnson1233 Жыл бұрын

Pay the agent. Just factor that into your costs.

@theconfusedchannel6365 3 ай бұрын

Thanks for sharing. I agree with first comment, ofcourse we should ready to answer such questions or back away. Some things not clear. This should be closing in Title company. Who holds the title? Title be transferred immediately with the contingency of loan? or you finish paying, then you will get the title?

@Deem14 10 ай бұрын

With owner financing will the county recognize the buyer as the new property owner on property appraisal website etc. ?

@PaceMorby 10 ай бұрын

Yes assuming you file the deed with the county. In some cases I don't though, it just depends on the deal.

@cominhomewithjohnalan9103 Ай бұрын

Interesting. ⁠@@PaceMorbycan you give a reason or two why you would not file the deed with the county?

@dextersimmons6020 Жыл бұрын

Man I love this fucking video 👍🏾👍🏾👍🏾🙌🏾🙌🏾🙌🏾

@BorisB-mw8gk Жыл бұрын

Hey guys! Appreciate your response to my question: Seller asked me what if you stop to make me a monthly payment? She says: "I don't want to go to court if you don't pay me" Please advise!!! Also if someone can touch base with me to provide high level of preparation to make this deal done - i would highly appreciate it!!!

@shepardoftheforest9105 Жыл бұрын

Dude...yes.

@PaceMorby Жыл бұрын

🙌

@aaronz6386 Жыл бұрын

But the question is, why would Susan sell you the property for $345 payment instead collecting $1000 from the rent??

@NAUTILYFE Жыл бұрын

‘Most’ people do not want to be landlords. In this scenario Susan wants to travel and doesn’t want to manage a property, she makes her money regardless of if Pace has the property rented or not. Susan, just like a bank/financial institution is guaranteed payment each and every month, regardless of property vacancy. Could Susan hire a management company to manage rental for her? Of course she could. However, in that case she is then also responsible for the expenses associated with that rental property and income is dependent on having a renter. By Susan ‘playing the bank’ financing to Pace, she assumes a set income without any downside risk like unknown expenses popping up that Pace (the new owner and landlord) must assume. Your question is absolutely valid - the main take away here is to fully understand your seller’s jumping off point (their motivation). In doing so, you can create a deal that makes the most sense for all parties involved. Every single deal is completely different that’s the beauty of real estate.

@linchen1811 Жыл бұрын

A dumb seller

@bradleystoldt318 Жыл бұрын

@@NAUTILYFE the deal is absurd for Susan to take. It will take this dude 22 years to pay that 100k with yearly payments of 4500. She could just take 60k cash from one of the other bozos that Pace mentions and invested that cash into ANYTHING that yields 3% and she would come out ahead after 22 years. Or as the fellow you responded to says, she's probably far better off highering a management company and keeping the house.

@NAUTILYFE Жыл бұрын

@@bradleystoldt318 seller finance deals generally always have a balloon payment within the first 5-10 years (though it varies of course). If you’ve ever looked at an amortization schedule, most interest is paid to note holder/financial institution within first 10 years, so not only is she collecting interest but she’s getting her full asking price in 5 years when ballon payment on note comes due. Seller financing is typically used by investors during high rate cycles as a temporary fix. 99% of the time these would be refinanced out before the balloon is due in 3 years or so. If you’ve never bought property like this it’s fair you wouldn’t know or understand. The end game is never to pay Susan for the next 30 years it’s again a temporary solution to get her her asking price (that she’s been unable to get) and as a buyer get a better rate than a bank would offer and cash flow it. Also she said she wouldn’t take 60k she wanted her number at 100k and wouldn’t move off of it - he offered it and she got it. She also said she didn’t want to hire a PM company, she doesn’t want to be on the hook for repairs and dealing with months where there’s no tenants. As the ‘bank’ you get paid regardless of occupancy status. Would a PM be smart, sure, if that was the situation, but it’s not here. That’s real estate, every situation is unique and this just happened to make sense for everyone.

@Tony-dz2jr Жыл бұрын

I agree

@theartguyshop 8 ай бұрын

Literally just clicked. Thank you so much!

@PaceMorby 8 ай бұрын

My pleasure! Hope you like it

@myfutureestates 6 ай бұрын

🔥

@PaceMorby 6 ай бұрын

🔥✌🏽

@cmdv42 Жыл бұрын

💯💯💯

@peyvandmanavipour 8 ай бұрын

What does principle payment means?

@EsssPee 8 ай бұрын

Tx, much appreciated ?… I the or a real estate scenario like this, a) At what point in the process are the deed / title put in the buyers name b) Is the seller required to hold any of the monies received in an (untouchable) escrow account?

@patrapper7367 Жыл бұрын

And it's difficult to find people with these special scenarios yeah you could do the postcard thing like he did but let's be realistic that's few and far in between