Here's something that's come off the table over the last few years:
And that is the idea of an owner carrying their contract. We don't hear that term anymore because interest rates became so low, that no one would consider carrying a contract. Well with interest rates rising, this conversation would be something that we should be having with sellers now again.
And that conversation could be as simple as this:
"Hey, Mr. And Mrs. Seller, I just have a quick question. You guys have a pretty good equity position in your house. And just one thought came to mind. As interest rates are rising for typical mortgage rates, have you guys ever considered carrying a contract yourself? In other words, acting as the bank. This is where somebody would offer you a down payment, large enough to pay off your note that you have now and pay all the fees and everything else that's associated with the closing.
"But then after that, you'd have an income stream coming to you every month, just like a bank does. And you'd be charging interest just like a bank does."
Now, this may be appealing to some buyers who, for whatever reason, maybe have changed jobs or changed careers. There's a lot of reasons why people can't qualify for traditional financing. This may be appealing and it may open up your buyer pool.
Now, you don't have to do it. But it's something I wanna put out there as another possibility.
Now this is powerful, especially with investment properties where people are exiting an investment property, because they may say, "You know what? I want to take that capital gain that I would've paid on this investment property. And I wanna stretch out that capital gain over a period of time. So I'm not taking one big giant hit. I wanna take it over the next 10, 15, 20 years."
That can be an opportunity. By the way, these mortgage notes don't have to be a 30-year note. They can be amortized for 20 or 30 years, but they can have a call date. The call date could be in the next 2, 3, 4, 5 years when these people can then qualify for a traditional mortgage. So you can put a call date on it.
Getting creative and thinking outside the box, definitely something we all need to be doing as the professionals in the room. And just talking about different possibilities with sellers will let them know that you're the expert. And you are creative. People like creativity.
Even if they don't take it, they're gonna think, "At least he's trying something and having these conversations with us."
I hope this helps you today. Go out there and crush it in the market.
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