What if I told you you can buy your first rental property with just $100, without using a bank, without getting a credit check, without having a license? It's possible. I've done it plenty of times since 2002. My students have done it over the years. And in this video, I'm going to share with you exactly how you can do the same exact thing step by step using a simple strategy that we use in the real estate investing community. Now, just to be clear, you're not buying any rental property with just $100 out of pocket. What you're doing is you're looking for problems that you can solve. And then you're going to structure the deal differently than how the banks want you to structure it. You're going to do this using a simple strategy called owner financing where you're going to use the seller as the bank rather than going to the bank to get a loan. And because of that, if you know how to ask the right questions and solve the seller's problems, you can get your first or next rental property with very little money out of pocket. Now, I've done a very similar video to this in the past that got over three million views. You can check it out right here. Now, in this video, I share with you how you can buy your first rental property using seller financing or owner financing, which is used interchangeably, but sell it on a lease purchase. This way, you have an exit strategy if you can't cover the mortgage. In this video, I'm going to share with you how to use the same strategy in owner financing, but keep the property long-term, making it a true rental property. So, let's start with what owner financing actually is. Owner financing is when a seller allows you to make payments directly to them rather than you having to go to the bank to get a mortgage. So, essentially, the seller becomes the bank. You become the buyer, and you both agree on terms. So, you make your mortgage payments directly to the seller instead of a bank. Now, why would a seller want to do something like this? Because they own a house free and clear. Because they don't want a big tax hit all at one time, which they will get if they were to sell the house outright, or because they want monthly cash flow and don't want to deal with tenants anymore. It's really a win-win situation when a deal is structured the right way. Now, once you get that rental property, you're still going to need to manage the money the right way. And that's where the sponsor of this video comes into play, baselane.com. Baselane is a free banking platform built specifically for real estate investors. You can collect rent, track expenses, generate reports, and keep your personal or rental finances separate all in one place. It's professional, easy to use, and 100% free to sign up. And as a matter of fact, once you do sign up, Baseline is going to give you a $100 bonus once you fund your account. So, go ahead, hit the link in the description box below. Get your free base lane account set up right now before you get your first rental property. It'll make you look like you've been doing this for years. So, with that being said, let's go ahead and get into the stepby-step breakdown. The first thing you have to do is find the right property. Now, when it comes to owner financing, you have to find properties that are free and clear. That means there's no mortgage on the property. Now, you can easily find these leads on platforms like Investor Dealp Pro. In fact, let me show you exactly how it works. All right, so we're here in Investor Deal Pro. Now, what we're going to do is look for properties in an area where we want to do owner finance deals. The best way to find these types of deals is to filter them out through free and clear property. So, we're going to go ahead and for the purposes of this video, we're going to type in Charlotte, North Carolina. I'm going to go ahead and click on search. And once I click on search, you're going to notice a new page pops up with a bunch of tabs on it. I'm going to go ahead and click on the filters tab. And as you can see, right below where it says lead types, there's 95,76 free and clear properties in the Charlotte area. So naturally, I'm going to go ahead and click on that. Now, we're not only looking for free and clear properties, we're also looking for the type of property that we want, as well as a heightened level of motivation. So, for example, the best way to find the type of properties that we want is to go down to where it says property features. Now, under property features, you'll see property types. Now, I know that I like single family and multifamily properties. So, I'm going to select the drop down here, and I'm going to deselect town houses, apartments, and other. And I'm going to focus directly on single family and multifamily properties. That's what I like. I also like properties with a minimum of three beds and a minimum of one bath. Now, I'm going to go ahead and leave square footage and lot size alone, but I also like properties that may need a little bit of work. The best way to find those is to search for properties 30 years old or more. Now, this also heightens the level of the seller because sometimes sellers, they own a property for so long, they never do anything to it. Maybe it's time for the HVAC to be done, the roof, maybe the windows need to be done. Maybe the property has cosmetic repairs that need to be done, the hot water heater is going. The property starts to become a problem the older the property gets. For the purposes of this video again, when it comes to year built, I want to look for properties that are at least 30 years old. So, in this case, I'm going to put for a maximum year built, I'm going to use 1995. And then when it comes to ownership type, I want to deal directly with the property owner. Now, I can select other types of property owners like dealing with a business or financial institution or the government or a trust. Could I find property store trust? Absolutely. But I want to know for sure that I'm dealing directly with the individual who owns the property. So I'm going to go ahead and select individual. And I want to know that this property owner has some equity in the property. So I want at least a 10-year ownership history on the property as well. In addition to that, I could focus on owner occupied properties. The original owner could be a really good one when it comes to owner finance deals. Instate absentee owners, meaning they're probably landlords. they they don't live in a property and out ofate property owners meaning they could be landlords or this is their second home or maybe they just live out of state and they own this property as well. I personally would focus on out ofstate property owners and the reason for that is because with this type of property owner it's way more difficult to take care of a property when you live out of state. There's going to be costs involved with owning a property. There's going to be maintenance involved with owning the property when you live out of state and it's going to be that much more difficult to be able to maintain it. They're probably going to have more exposure to code violations and other factors when they live out of state that they probably won't have when they live near the property. So, the best way to find that heightened level of motivation is to focus on absentee owners that live far away from the property. Now, obviously, I can select other filters that will draw out more motivation from the seller. I think you guys kind of get the picture of what we're doing here. So, essentially, we want to focus on free and clear properties. There's no mortgage on it. We want to look for the type of property that we're interested in. We want to make sure that we're dealing directly with the owner. Make sure that there's some equity in the property. And another motivating factor, not to diminish the list too much, is to make sure that the property is at least 30 years old and the property owner lives out of state. These are two really good motivating factors to help draw out a property that may need some work and it's causing a seller some problems. So, if we can find the problem, we can solve the problem. And as you can see, there's 521 results that actually popped up. Now, I can go ahead and skip trace this list as well by selecting this drop-own arrow right here. Go ahead and select all. And then up at the top, you'll see my leads. You can go ahead to my leads and then do what's called a lead trace. This is essentially a skip trace. It'll cost you about 10 cents per lead to get all of the phone numbers and emails and all of the necessary information that you need to contact these sellers. So, with this particular list right here, it might cost me $50 to be able to pull the entire list, but I'll have all the information I need to reach out to the seller as many times as possible. One thing you want to keep in mind is it's going to take you multiple times of reaching out to somebody before they trust you enough to want to sell their property to you. Unless there's an extremely high level of motivation and they just want to get rid of the property right away. So sometimes you got to reach out to people five times, 10 times, 20 times, 50 times in order for you to be able to develop that relationship and get them at the right time. Always remember time changes circumstances. If somebody's not ready to sell today, maybe they'll be ready to sell in three months. You don't know. It just depends. That's why you got to keep reaching out to people, putting yourself in front of them, and building on that relationship with them. Get them to trust you. And when they're ready to sell, they're going to reach out to the person who they have the biggest relationship with. And that's going to be you if you do it the right way. Now, how do you reach out to these sellers? Very simple. You can send them a letter. You can send them a postcard. You can send them a text message. you can send them an email. Make sure you're compliant with the law based on how you're marketing to these sellers. For example, if you want to stay text compliant, I'll pop a video up at the top that you can watch to make sure you're compliant when you're reaching out to these sellers. Keep yourself out of trouble. Your goal is to help the seller, not cause problems for yourself. The best way to do that is to stay compliant and make sure you are consistent in reaching out to them. That's how you use Investor Deal Pro in order to be able to find free and clear properties. If you want to check out Investor Deal Pro, I'll leave a link in the description box below. Let's move into the next step. Once you reach out to the sellers or the sellers are reaching out to you, depending on how you're marketing for deals, the next thing you need to do is find out more information about the property so that you can present your offer. The best way to do that is to focus on four key factors. You need to focus on property information, property condition, price, and selling options. So, when it comes to property information, you're simply getting basic information on the property. How many bedrooms, how many bath, things like that in order to be able to determine what type of property this is. These are also used as conversation starters to get the seller talking about the property so that you can draw out more information from them. The best way to talk to a seller is to ask them open-ended questions. An example with that would be, "Tell me a little bit about the property." And let them talk. As they're talking, ask them more questions when you see fit. The next thing you want to find out is property condition. So, an example of that would be, "Mr. Seller, this sounds like a really nice house. I'm shocked that you even want to sell it. If you were to make any improvements to this house, what would you do in order to increase the value of the property?" And then let them talk. So, you want them to tell you a little bit about the kitchen. What would they do differently in the kitchen? What would they rate the cabinets from a one to a five? One being the worst, five being the best. What would they rate the bathroom, the floors, the paint on the walls, everything in the house? You want to know more about the property? When was the last time they did the roof? When was the last time they've replaced the HVAC system? When was the last time they've replaced the hot water heater? Did they do the electric? Is the the plumbing original? You want to find out everything you can about the property's condition and let them tell you what they would do in order to improve the property. Why do you want to do this? The reason why you want to do this is because as the seller is talking and they're telling you about what they would do to improve the property, they'll easily realize how much work the property actually needs and that the property does need improvements. So, when it comes to negotiating the deal on the other end, they'll realize they don't own the Taj Mahal. So, keep it really simple. Get property information and then find out the property condition. And then we get into the price. Now, when it comes to price, you don't want to find out what the seller wants for the property. You want to find out what they need for the property. If you can find out what the seller really needs for the property, and you can find out their motivating factors for wanting to sell, this allows you to create a win-win opportunity for you and the seller at the end of the day. Which leads me into the final thing that you really want to find out. offer options. Now, when it comes to offer options, the best question you can ask a seller in order to be able to find out if they're interested in owner financing is, "Would you take your profit in the form of monthly payments over time?" And then be quiet. If the seller says yes to this question, that means that they're interested in owner financing. They don't mind spreading out their profit over a period of time. Sometimes they may have to think about it, sometimes they won't. Sometimes they understand what seller financing is. Sometimes you have to educate them a little bit. But those are the four key things that you really want to focus on. You want to focus on property information, which is basically a conversation starter. Can you tell me a little bit about the property? You want to focus on property condition so that you can get an idea of how much work the property needs. You want to find out what they need for the property in price, not what they want. And you want to find out if they're willing to take their profit in the form of monthly payments over time. If there is a level of interest, you can explain it in more detail so that they understand. If there is no interest, you can move on to the next lead. But once you find the right person, then you move into step number three. All right. So step number three is to go ahead and make a simple offer to the seller. So for example, let's say a seller wants to sell their property. They're willing to take $100,000 for it and take their profit in the form of monthly payments over time. What you can do is offer the $100 with $100 down, maybe at $900 a month, knowing you can rent it for, let's say, $1,500 a month. You do this for five years with a balloon payment due, meaning a lumpsum payment due at the end of the term. You can also extend it out even further. Let's say you wanted to do a 30-year loan instead of a 5-year loan. You can ask for it. Creative finance, seller financing, is only as good as what you can ask for and what you can think of. Make the property affordable for yourself. Present the offer to the seller and all they can do is say yes or no. In this case, you want to offer $100 down. You need the property at $900 a month. This will provide you with $5 $600 in cash flow that you can put in your pockets every single month. The seller gets their $900. They don't have a tenant problem. They don't have a toilet problem. They don't have a tax problem. They don't have any issues regarding the property because you become the new owner. And this is what you sell them on. You sell them on not having to do repairs, not having any headaches, but receiving cash flow every single month. Now, let me show you how this would work in real time. In fact, while I'm actually shooting this video, one of my coaching clients contacted me with a potential lead that she had. So, I'm going to go ahead back to Investor Deal Pro, pull that lead up, and show you how I work the numbers to tell if it was a deal or not. So, let's go to Investor Deal Pro. All right, so we're back in Investor Deal Pro. What I'm going to do is pull up a property in real time. This is a property that I literally just received uh short while ago while recording this video from one of my coaching clients. Now, she mentioned that the seller is interested in taking payments over time. So, they're interested in seller financing. What I'm going to do is run the numbers here to see if this is a decent deal or not. So, I'm going to type in a property address here. And once I type in the property address, I'm going to go ahead and scroll down a little bit to find out a little more information on who the property owner is. I can find out more property insights about the property, how long the property owner owned the property. You can see that she paid $92,000 for it back in 2013. She wants $275,000 for it. I can click here and run comparable sales if I wanted to. As you can see, we can run comps here. We can see that there is an active listing on the same street for $319,500. Judging by what these houses sold for nearby, I think that that property is overpriced. Even at her asking price of $275, it may be slightly overpriced. But does that matter when it comes to seller finance deals? Maybe not. if the property can cash flow. The best way to find out if the property cash flows is to go to a site like rentometer.com. And then what we can do is go ahead and put the property address in to renameter. You can see it right there. In order to see if we can get a decent amount of rent for the property. Now, I know that this property is at least four bedrooms, uh, three baths. It's a house. So, I'm going to go ahead and check rents. And Rentometer is telling me that this property has a median rent range of $2,185. So, let's say $2,200 a month is what I can get for this property. Now, based on her asking price of $275, I need to be at least 1% of that amount in order for this deal to make sense. This property can only bring in $2,185, which tells me it's below the 1% that's needed in order for the property to make sense financially. So, in order for this deal to make sense, I needed at least $2,700 a month that can be generated in this property in order for me to be able to move forward on this deal. But unfortunately, she's asking a little too much. this deal would make sense around 215 220 if she was realistic on her price. So, this is a deal that didn't make sense, but the seller did say they were interested in taking payments over time. Unfortunately, the numbers just don't make sense. Now, once you find the right deal, the seller agrees to all the terms, you agree to the terms as well, then you're simply going to go ahead and close the transaction. The best way to do this is to use either a land contract or a promisory note. Depending on where you live, you can use an attorney or title company. Again, depending on where you live and your state requirements, and then simply close a clean transaction with the seller. Another thing you want to do is get with a third-party payment processor so that they can collect payments every single month, disperse it to the seller, disperse it to your mortgage company, and everything is done by the book. One thing that you want to remember in real estate is always protect both sides. You want to protect everybody in a deal. Make sure you're doing clean business and make sure everybody's happy in a transaction. You're creating win-win situations. And this is how you stay in business for a long time. Part of the reason I've been in business since 2002. So, what's up with the $100? How does that work? Simple. The $100 is going to be provided to the seller in the form of an earnest money deposit when you sign the contract on the property. Now, look, like I said in the beginning, the $100 is not going to work with 99% of sellers. You're not looking for 99% of the sellers. You're looking for 1% of the sellers who have a heightened level of motivation. They're going through something in their life. Maybe it's financially, maybe it's physically, maybe it's mentally, whatever the case may be. You want to make sure that you're dealing with motivated sellers. And there's a bunch of these types of sellers out there. They don't care about the down payment. They care more about the deal that's structured and how it's going to benefit them. So, as long as you focus on the benefits of the deal and you don't focus on the amount of money that they're getting down, you'll be able to negotiate your down payment accordingly. Now, again, some sellers may want a little more money down even after providing them with $100. How can you come up with this type of money? Maybe you can take out a credit line. Maybe you can partner with somebody. Maybe you can get a private money lender. There's other key motivating factors where you can get access to capital in order to be able to come up with a small down payment to put on a property in order to be able to own cash flow on the other end. But are these $100 deals out there? Absolutely. We do them all the time and it's all in how we negotiate the deal with the seller. You offer them a $100 down, they can say yes or they can say no. Majority of them will say no. But again, you're not looking for the majority. You're looking for the minority who's looking for a better solution to sell their property. And right now, we're in a buyer market. These opportunities are everywhere. In my local area, the average house is sitting on the market for at least 60 days. And since I'm looking for owner finance opportunities, all I got to do is look for properties that have been on the market for a lot longer than that 60 days. Chances are those sellers are going to be willing to negotiate. Listen, owner financing is powerful, but obviously there's going to be some things that you want to watch out for as well. You want to make sure you get the deal in writing. This protects both sides of the fence. You want to make sure that the seller's protected as well as yourself. I mentioned that already. You want to be honest about your plans. Tell a seller exactly what you're looking to do. Never deceive them. If they know what's going on, they're going to build trust in you over time, even when it comes to the $100 deposit. Number three, don't overpromise. Make sure you can make your payments every single month. The best way to do that is to make sure the property is going to cash flow in advance. Remember, the goal is not to hustle people. The goal is to help people get out of bad situations while creating win-win opportunities both for you and the seller involved in the property. And here's why I love owner financing, especially for beginners. No credit checks involved, no income verification, no jumping through underwriting hoops when it comes to lenders, and no 20% down deals. You don't have to put 20% down on these properties. So, how do you get started? Again, look for free and clear properties in your area. Contact the sellers, negotiate the deal, offer them $100 and the contract, make sure it's a solid deal for them, create a win-win situation, and you'll be well on your way. And if you want some handholding and you want to get a head start in learning all of the nuances when it comes to doing these types of deals, be sure to check out Dealpro Coaching.com. That's dealpro coaching.com where you work with me and my team and we'll walk you through step by step exactly how to get your first or your next owner financing deal done. Be sure to like this video, subscribe to the channel, click the notification bell, and I'll see you guys on the next one. Take care.