Every serious investor needs to know how to find investment properties near them, but it is even better when they offer owner financing, too! And that is what I am going to teach you today. It is possible to find investment properties with owner financing, but you have to know where to look.
So, let me teach you.
How to Find Investment Properties with Owner Financing
Now, first thing’s first, let’s recap the definition of an owner financed home. I know I’ve talked a lot about this in posts like this and this, but you might be new here. So, here we go. An owner-financed home is a property that does not have a mortgage, lien, or anything stacked up against it. It is owned free and clear. If it has even a little line of credit against it, it cannot be owner-financed.
Now, you can definitely invest in properties with these things, but that is another topic for another day.
So, once you know that the house is owned free and clear, without anything against it, then you basically work with the owner as the financer, or the bank. Make sense? This is what makes an owner-financed house.
Got it? Good.
But, here’s the important thing you need to know: owners are not out there just openly marketing “owner financed!!!! Come buy me!!!” In fact, if you see a sign or advertisement like that, it is probably an investor like you!
So, since I want you to get your first deal done fast and that shut-up check to grow your confidence as a successful real estate investor, we are going to look where the owner-financing people are. Right?
Because we want to find investment properties that actually can offer owner financing. That’s the goal.
Since these sellers are not telling you openly that they will owner finance, you have to create these deals. And there are two types of sellers who are absolutely perfect when it comes to qualifying for owner financing a house: people who inherited property and tired landlords.
Now, let’s discuss how to find investment properties owned by these people and work with them…
#1 Inherited Property
People inherit properties all of the time and I’d say the majority of those people no longer live in the property either. Sometimes it is even located in a whole different state from where they live. And, the property can end up being more of an inconvenience than a blessing for the new inherited owner. Remember, some of these houses could need a ton of work to fix up and get “live in ready” and most people don’t want to deal with all that.
So, you have an opportunity to relieve them of this undesired burden. This is a problem that you have the capacity to help them solve!
As you drive around to find investment properties, keep your eyes open for run down properties that may not have been cared for well. Then, do your part to find out who owns the property. There’s a GOOD chance that it is an inherited house.
When you start talking to these owners, you want to focus on the things they already have going on in their everyday life. Likelihood is that they already have a mortgage they pay monthly, possibly kids, and just the busyness of life. Ask open-ended questions to really get an understanding of what they have going on, because that is how you will know how you can best help them.
If you’ve done a good job, you will have heard about something that they pay monthly that tends to be a problem for them. Maybe it’s a car bill or student loan payment, but whatever it is, that is the thing you want to help alleviate by buying “mom’s house” for them.
This is the KEY: solve their problem, not the problem that you think they have.
“Mom and dad’s house” is not the problem; they couldn’t care less. But, the thing that really bothers them because of its monthly expense is the thing you need to uncover and help.
“Well alright, I know you said that you hate having to put $500 every month towards your student loans, so how about I start sending you $500 every month, which will take care of your problem, AND I’ll be buying the house from you at the same time? We’ll kill two birds with one stone! I’ll send you a bunch of money every month, you won’t have to worry about anything like tenants or rent or whatever. I’ll do it all. What do you think?”
Then, SHUT UP.
I know. The struggle is REAL, but the silence in the negotiations is CRITICAL. Listen up. The sellers can’t stand it even more than you and often they start talking out loud against themselves on your behalf! So, you just listen and nod in agreement with the ideas that you can do for them.
THAT is how you find investment properties and create owner financing!
Don’t go lookin’ for it! To find investment properties, go look for people who have inherited mom’s house, establish the relationship, create those conversations, and build the “know, like, and trust” factor. Be a woman! You know that I think women make the best real estate investors and this is why! This is your superpower!
Be someone who the sellers can confide in; who they can confess their sins to! Who they can actually tell their REAL problems to so that you can solve it, because they trust you!
Make sense? Find their problem and solve that and you will have yourself a deal!
#2 Tired Landlords
Okay, the second group that makes an AWESOME owner financing seller candidate is the tired landlord. This is someone who probably started buying houses 5-15 years ago, bought a house in order to be a rental house, did all the improvements, worked with tenants, etc. for YEARS. And, they are tired. They just don’t want to do this anymore.
They are DONE with the improvements and dealing with tenants and they want OUT.
Seriously, these people exist everywhere. You can find investment properties owned by them in your area, too! They are stressed out and tired of being a landlord.
These people are practically begging and crying for someone like you to come save them from their struggle. Their life is just upside down and messed up because they are stuck.
When you come through and meet them where they are, you give them hope!
“I understand. This can be really stressful!” And MEAN IT. Don’t BS them. Show compassion and empathy for their struggle.
Because when you do, you give them such a sense of relief at being understood. And they need to feel that relief.
“I understand. This can be really stressful. Want me to help ya?”
And you’re off, because these tired landlords are just looking for a fast way out! They usually have the house paid off because it takes a free and clear house to do owner financing, as we already said. These people may have even bought it at an auction or paid it off over time.
In addition, guess what, these people also often have a bunch of houses, not just one. So, if you are able to develop that relationship to help them, you will likely also gain access to all the others. YAYYYY!!!!!
When you find investment properties owned by tired landlords, you have an incredible opportunity.
When the sellers know you can make their payments and take away their problem and headache, they are more than happy to sell you the property (and possibly others, too). BUT with payments over time, which is the best part about owner financing.
It’s like working with a bank but without all of the headache and hassle. Two people working together to strike a deal for the seller to make money without all of the costs and fees of working with the middleman and you get a house in the end!
But, you gotta find investment properties from people who inherited houses or tired landlords. You do this and you will have the best path for success!