How to Owner Finance a Property | Make Huge Profits with This Strategy

Summary

In this video, Grant Kemp from Creative Cash Flow Comm discusses the concept of owner financing a free and clear property, where there is no mortgage involved. He explains the benefits of such properties for learning about owner financing strategies and demonstrates how to calculate payments using the 10B2 financial calculator. Kemp also highlights the importance of understanding a seller's motivation and the potential for significant profit through owner financing, emphasizing the power of leveraging real estate to generate consistent income.

Takeaways

• 🏠 Free and clear properties are houses with no debt, where the owner has full equity and can use the property for owner financing strategies.
• 📚 Studying free and clear properties simplifies understanding of owner financing by eliminating variables like underlying liens and bank involvement.
• 💡 The speaker emphasizes the importance of the 10B2 financial calculator for real estate investors, highlighting its role in simplifying calculations and aiding in strategic decisions.
• 💰 The script introduces the concept of owner financing as a means for investors to become the 'bank', providing loans to buyers and earning consistent profits through payments.
• 📈 The presenter discusses the benefits of using a 30-year note for owner financing, allowing for the accrual of maximum interest over time.
• 🤔 The importance of understanding the seller's motivation and 'bottom dollar' is stressed for successful negotiations and deals in owner financing.
• 📝 The 'wants and needs pamphlet' is introduced as a tool to help investors align seller expectations with realistic outcomes in real estate transactions.
• 🔢 The script provides a detailed example of how to calculate payments and potential earnings on an owner-financed property, using an $100,000 property as a case study.
• 📈 The potential for significant earnings through interest payments on owner-financed properties is highlighted, with an example of turning $100,000 into over $300,000 in earnings.
• 🔑 The concept of 'today money' versus 'tomorrow money' is introduced, with owner financing being an example of the latter, providing long-term income.
• 🛠️ The versatility of owner financing is underscored, with the acquired property potentially being used for renting, flipping, or other dispositions depending on the investor's strategy.

Q & A

What is a 'free and clear' property?

A 'free and clear' property is a house that is owned outright by an individual without any debt or mortgage on it.

Why are free and clear properties beneficial for learning about owner financing?

Free and clear properties are beneficial for learning about owner financing because they simplify the process by eliminating the involvement of a bank and the complexities of underlying liens or mortgage payments.

What does the term '10 B to financial calculator' refer to in the context of the video?

The '10 B to financial calculator' is a specific financial tool or app used in the real estate industry for calculating various aspects of owner financing, such as payments and interest rates.

How much does the 10 B to financial calculator app cost?

The 10 B to financial calculator app costs $5.99 and is available on both the Google Play Store and the Apple iTunes Store.

What is the significance of the top row buttons on the 10 B to financial calculator?

The top row buttons on the 10 B to financial calculator are crucial as they represent the main functions used in owner financing calculations, including the number of payments, interest per year, principal value, payment, and final value.

What does the acronym 'PV' stand for in the context of the financial calculator?

In the context of the financial calculator, 'PV' stands for 'Present Value' or 'Principal Value', referring to the initial amount of the loan or investment.

What is the typical interest rate used in owner financing as mentioned in the video?

The video mentions a typical interest rate of 9.5% for owner financing.

Why might an owner choose to owner finance their property?

An owner might choose to owner finance their property to avoid the involvement of a bank, to potentially earn more interest over time, and to have more control over the sale and payment process.

What is the advantage of a 30-year note in owner financing?

A 30-year note in owner financing is advantageous because it allows for the accrual of the most interest over time, setting up a long-term income stream.

What is the process of 'backing into the deal' and why is it important?

The process of 'backing into the deal' involves starting from the end of a potential investment scenario and working backwards to determine how much one can afford to pay for a property. It is important because it helps investors analyze deals and make informed offers based on potential profits.