How to Create Wealth through Seller Financing with Brian O'Neill
We begin the episode with Brian sharing his background story and how he ended up in real estate. He shares that he was conditioned early on in life to go to school, get a good job, save money, buy a house and hopefully retire at 75 years old. He was in sales for about 25 years and was interacting with business owners with a net worth that was ten times higher than his, which helped him in his real estate career. According to Brian, in sales, you can only make more money if you’re trading more time or moving up the corporate ladder, and this made him so nervous. This motivated him to stop the analysis paralysis and pursue his dream of real estate investing.
We then talk about Brian's model and end game with seller financing. He shares that there are two models he likes to use. First, you can have control of properties without ownership and create multiple exit strategies. Second, you can take the deeds with seller financing. Brain's preferred strategy that pays him the most money is finding buyers who cannot qualify for a bank loan and leasing the house to them until they qualify for a loan to cash out. Brian is a long-term thinker, and this works for him. However, you can also leverage other existing strategies such as short-term and long-term rentals. He also shares that he finds his properties primarily by looking for sellers who are actively trying to sell their house, through expired listings, for sale by owners, or rent by owners. This is all inexpensive public information.
Next, we discuss how Brian gets houses seller-financed and how he protects the transaction. Brian shares that before he sells a house, he likes the buyers to prove themselves using a lease option for a couple of years. After buying properties from a seller, Brian takes over their loan payment, and the house gets deeded to him. The loan stays in place until the end buyer gets their loan to cash out of the house. This can take 5 years, 10 years, or whatever the agreement is, but the longer you go, the better for you as an investor. To make the deal profitable, Brian sells the houses for more than the original loan payment. According to him, if you do this correctly, you will not be a landlord. The buyers are responsible for the utility, repairs, and maintenance because they act as owners of the house, which makes it more rewarding.
We then talk about how Brian frames the conversation to find suitable candidates for sellers' financing. According to Brian, it takes a while to get there. In the beginning, he was petrified simply because he didn’t know what to say, but he had to learn it. The fear of phones can be traumatizing but treating a seller like a neighbor who has a sale sign on their house makes the conversation easy and natural. For Brian, this helps him in understanding their situation, and there are four things that he desires to hear from a seller before they know if they are a candidate for seller financing or not: why they are selling their house, why they took their house off the market, the condition of the house, and whether they need to cash the house out to move on to the next thing.
Lastly, we talk about Brian's portfolio, plan, and how big he wants to get. Brain shares that he plans to get as many houses as possible on long-term financing contracts for deeds to have the cash flow coming in and never have to worry about cashing out. For Brian, the ideal number is 100, and he has a long-term plan to get there within five years. Deed contracts take time because not every seller is a candidate, but it’s a powerful investment channel if you do them right. Brian's goal is to get into more long-term financing, and he needs 10 to 15 such deals a year to achieve his goal of 100 before moving into other asset classes like multifamily.
Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Brian O'Neill and get valuable information on how to create long-term wealth through seller financing projects!
“Fear of the phone can be traumatizing, but treating a seller like a neighbor who has a sale sign on their house makes the conversation easy and natural.”
- Brian O'Neill
“When there is a lot of fear and uncertainty in the market is when you need to double down.”
- Brian O'Neill
“The market doesn’t have bad or good feelings. The way you react and position your business has everything to do with your success.”
- Mike Simmons
“Deed contracts take time because not every seller is a candidate, but they are powerful investment channels if you do them right.”
- Brian O'Neill
“Sometimes there is a lot of emotional attachment in a house, and you’ve to let the seller go through that process, no matter how excited you are about the deal.”
- Brian O'Neill