Hey,
Quick question.
What do you do with a lead where the seller won’t come down on price?
Most wholesalers kill it. Mark it dead, move on, and chase the next one.
I used to do the same thing.
Then I realized I was solving the wrong problem.
The seller didn’t need a lower price. They needed a different plan.
That one reframe has helped me close several extra deals a month.
Here are the three structures behind it.
1. Seller financing
The seller acts as the bank. No lender is involved. You make payments directly to the seller.
Why might a seller say yes?
They get their full price.
They receive monthly income.
It may work better for their taxes than receiving one lump sum.
You need a seller with little or no mortgage, along with terms you can actually live with: the down payment, interest rate, and length of the loan.
I also want a balloon payment so I’m not locked in forever. Five years is the minimum on my deals.
2. Subject-to and wraps
This can work for the seller who owes close to what the property is worth. They can’t take a discount, and they can’t bring cash to closing, so a traditional sale isn’t happening.
You don’t buy the house in the traditional way. You take over the payments. The loan stays in the seller’s name, you get the deed, and the seller gets out from under the property.
One honest caution: know the due-on-sale clause, and handle insurance and title correctly.
This is not a structure to figure out live on your first deal. Get it right or don’t do it.
3. Lease options
This is my favorite of the three.
You control the property now and buy it later at an agreed price. The seller keeps the deed until you exercise the option.
Here’s why I like it: you can often offer full retail price and full market rent. You don’t need a massive wholesale discount.
Your assignment fee usually lands around 3% to 5% of the purchase price, and a 12-month term can work well.
This buyer is a retail buyer. A tenant who gets qualified to purchase the home during the rental period. Even though I have sold Lease Options to investors, I find it easier to sell a Lease Option to a retail tenant-buyer.
What these structures have in common
With Seller Financing & Subject-To/Wraps, I’m looking for the same buyer: an investor with an LLC who wants cash flow, equity, and time.
My floor is $300 a month in cash flow. That’s not greed. It’s breathing room for a vacancy or a repair.
So the next time a seller refuses to lower the price, don’t automatically kill the lead.
Ask yourself whether the seller needs a lower price—or a different plan.
Thanks,
Brandon Simmons
480-818-6460 Call or Text I answer my own phone.
www.BrandonTheMan.com (FREE STUFF)
0 comments