Learn More About House Academy Here
What to Do When Your Buyer Needs Financing (LA 1655)
Transcript:
Steven Jack Butala:Steve and Jill here.
Jill K DeWit:Hello.
Steven Jack Butala:Welcome to the Land and House Academy Show today, Entertaining Real Estate Investment Talk. I'm Steven Jack Butala.
Jill K DeWit:And I'm Jill DeWit, broadcasting from the Valley of the Sun.
Steven Jack Butala:Today. Jill and I talk about what to do when your buyer needs financing. Of all time, since we've been doing this, since 2014, '15, this has been, consistently been at least a top 10 question, maybe top five.
Jill K DeWit:It comes up often because people fall in love with your property and they go, "Oh, I don't have the money."
Steven Jack Butala:What I brought, I wanted to make this an episode today because it's really different for houses and for land. Very, very, very different financing animals for a bunch of reasons. Before we get into it, let's take a question posted by one of our members on the LandInvestors.com Online Community. It's free. And please don't forget to subscribe on the Land Academy YouTube channel and comment on the shows you like.
Jill K DeWit:Greg wrote, "Nobody has any money or credit and everybody wants a land contract." This is why I won't want to do ... I don't want to do land contracts. Number one, I can earn way more money over the course of the contract by buying and selling more properties with cash up front.
Jill K DeWit:Two, I have to deal with this person for years and who knows what will happen. Three, I have to deal with the neighbors for years. You're driving down my road. There is a homeless encampment on the property, et cetera. Dream it up. Four, liability? What if someone busts a leg or gets shot in a pistol fight? Where are these properties? Am I liable for that risk for the next three years? In my-
Steven Jack Butala:Opinion.
Jill K DeWit:... opinion, land contracts are only good when nothing else is possible, like no buyers.
Steven Jack Butala:Which never happens.
Jill K DeWit:Right. Tell me why you love land contracts and what I'm doing wrong with them. Liability clause, litigation clause. Should we just jump into the show because it all ties in?
Steven Jack Butala:Yeah.
Jill K DeWit:Okay.
Steven Jack Butala:Today's topic, what to do when a buyer needs financing. This is the meat of this show.
Jill K DeWit:I have a lot of notes, but do you want to go first or do you want me to?
Steven Jack Butala:Oh no. I would love for you to.
Jill K DeWit:Okay. So I put a plus. I have a minus and then I have pluses. So your buyer needs financing, whether it's land or a house, the first instinct is, oh, seller financing. They always like, they ask that too. Will you carry back on a house? And sometimes it's a good solution, but most of the time, it's not my first choice. It's never my first choice. Let's just say that. I will be open to it. This is the House Academy Show so I'm going to talk about that first.
Jill K DeWit:I would be open to it if it was a 30 day, 60 day, 90 day thing. We can see on paper what's coming down the pike. I am cashing in my retirement. Here's everything. We all know it's coming. Can you carry me just until this happens? And here's how it's going to play out. Those would be really the only situations I'd be open to.
Jill K DeWit:But what's interesting, there's a lot of people that like this. They like them because they're note people. They want to buy them and have a note and sell the note and that's their thing. That's not who I am. I'm an investor. I'm not a note person. And I want to get my money and move on and do more properties. So before I talk about other solutions, you want to talk about seller financing?
Steven Jack Butala:Here you have two options when you buy a piece of property correctly, the Land Academy way. Let's say you buy a piece of property for $10,000 and you know it's worth $20,000. You can buy the property for $10,000 and then put it on the market,