I sent her an email saying, Hey, these are my offer terms. So this is my letter of intent, property, address, blah, blah. We can buy your home any of the following ways and close to a real estate attorney or title company owner.
Carry program. If option two doesn’t work for you, we can keep existing loan in place and pay you the difference between the existing loan and price below at closing purchase price, 300,000 monthly payments of 1432 two year balloon, no money down. And technically this is 4% interest, but I’ll explain that in the paperwork we’re about to do. So she said, This is what she said to me. She said, the terms agree with what we talked over the phone.
We can move forward. I have two other properties, blah, blah, blah, if all is good, please ask Estro company to work on the paperwork. I look forward to working with you. So she agreed. It’s freaking that simple. And the property rents for like, 2000 to 3000 a month in Fort, Fort Myers, so great deal, right? It sounds too good to be true, so we’re gonna get it under contract and we’re going to see, we’re going to see what else happens. Okay, all right, so Henry, right, here is the seller addendum. So there’s a lot of ways to fill out seller financing paperwork, but I use an addendum, okay? And I just write out what the terms are in the addendum, and it’s, it’s as simple as that, okay, so I’m going to fill this out for everyone.
Alright, so make a copy. So we’re going to call this seller finance addendum, and this will be Fort Myers. Okay, so I’m going to make a copy, and it’s time to fill it out. Ask me if you have any questions, there’s two pieces of paperwork. You need a real estate purchase contract, and then you need a seller finance addendum. This agreement is between Noel man, I got too many tabs open. Man, this is crazy talk. No Win, okay. And my LLC is ventures of Nathan Payne enterprises. And what this is saying is, this is, this is referencing the agreement that you made, where they signed the purchase agreement, so that hopefully she signs it today. Let’s see. 316, I’m going to call her after this and just walk her through it. I’ll show you guys how to talk to a seller and walk her through an agreement. Byron, sorry,
Henry, what’s up? It’s not E that on a three or two. Oh, sorry, thanks. I’m glad you got my back, dude. 216, 23, the buyer and seller, when mentioned together, may be referred to as parties. Seller agrees to sell, the to buy, or the property known as and then we put the address in there, by the Bing, by the boom, so you’re just putting in the info property terms. Purchase Price, 300,000 remember, 300,000 that’s what she wanted. Seller carry back 300,000 because they are carrying the whole thing. We’re not putting any money down payments. And guys, by the way, I’m not like the guru of seller finance. I know how to do it, and I know that if I mess something up, my title company or the agency that I’m going to work with will catch it. But I fill out as much as I need to sell their carry back payments are going to be 14. What did we say? Henry is going to be 1432 is that right?
Yeah, a bow desk. That’s right, 214, 32 so it says payments for payments of 1432 flat fee not to be applied towards the principal of 700,000 so we actually are going to apply this towards the principal payments of 14. So this was a previous deal that I did where I did not apply towards the principal. So I’m going to say this one is a little bit more confusing because I was just doing interest only payments with this guy. Let me see if I have a different one that I can just compare. Okay, this one might be a little bit easier to to use. Purchase Price assumption of current note is 165 let’s see down payment to pay to be paid directly to Utah Home acquisitions upon acceptance, buyer will have one day acceptance date to deliver earnest money in the amount of 3500 amount will be paid to party, Tong, both sides, to close, buyer to be responsible, or paying all taxes and utilities.
So that’s something we’re going to have to we’re going to have to add in ours to pay the utilities, because she’s not going to be in charge of those. You want to write this stuff out so they they feel comfortable. You know, I’m saying, mm hmm, buyer to be responsible. So this is saying buyer to be responsible for all property taxes for 2022, and utilities. I would say buyer to be responsible for all property taxes and utilities after purchase, after close. Okay, so we’re responsible for that. Let’s see late fee of so this protects the seller. Late Fee of $95 of payment is not received after the third of each month. We can put that in there. I don’t care. That’s just saying we gotta make the payments to her or the the prop on the property on time, which is we. We gotta do that. Let’s see pro rate. April payment. Pay begins May 3. We’ll continue this. One’s. Specific. I think the seller is tripping out. We’ll see how specific we have to get with this one owner policy and all title fees paid by buyer. Okay, we’ll do that.
So on line number three is a total receivable of only year, $70 No, sorry, I was I didn’t finish making that one owner owner’s policy and all title fees paid by buyer note due August 3. So this is saying when the the note is due, right? The balloon payment, buyer to pay 950, a monthly amount, directly to initial seller, aka Daniel e so this is paying it directly to them. Greg wilding, the buyer will be responsible. Blah, blah, blah. So this deal, that this one I’m looking at that we did here was we stayed in the middle. We had a buyer, we sell or finance the deal, and then we had a buyer pay us a fee, and then we stayed in the middle. That’s why this is a little funky. But let’s go back to this. Okay, payments of 1432, flat rate to be applied towards the principal.
I’m not going to write that. I’m going to say 4% interest rate. There you go. 4% interest rate. Payments of 1410, late fee of 95 buyer will be responsible. Owner’s policy and titles insurance will be set to include the seller as a mortgage. E payments begin the day after tenant vacates the property. Payments begin the the day after tenants. Yeah, that’s what we’ll do, because there are tenants in there no guarantees of rent a payment from current tenant, no due six months. So this is two years after Close of Escrow in a balloon payment, paying the remainder, remaining balance of so again, 300,004% so we go down here to two years, which is 24 months, so we would basically owe her at the end of that’s how much we would owe her at the end of two years. So she’s making all this interest. So I know this doesn’t sound like a time, but this is how much she would make. I’m on the wrong tab, dang it.
Okay, so 24 months, 24 pay periods. So by selling this house to us, she is going to get paid 288 750, after two years, right? Because it’s gotten paid down no due two years after close of escrow and a bloom payment, paying the remaining balance of 288 so that’s what she gets. And just so you know, like she’s going to make this much in interest over the two years. Okay, so there’s that dude. What is going on with this formula? Let’s go. Come on. So maybe I go some I want this 24 periods. Okay, there you go. So she’s making an interest over the next two years, $23,592 right? And plus when we purchase the property out. So you add this together. So instead of selling the house for 300,000 and getting that in two years, she’s getting an additional she would, basically, over two years, take an extra $23,000 on the sell of her home, to 23,592 because she’s selling it on terms and she’s getting interest payments right. So that enables her to get her price that she wants, plus more money by waiting two years. Any questions? 23 592, so all I did Henry is I took the interest over the 24 payments and I added them up, and that’s how much she’s making an interest over those. Since she’s financing the deal, it’s like what a bank would make.
All right, so, so CC, make a 23 23,000 over two years, yeah, over two years in interest. And then if you add, if you add it together, she’s really making $323,592 instead of selling it to me for 300,000 she’s making extra money by financing me. Oh, so, so this, this look bad compared with when she go selling with the router, yeah? See, making a more, yeah, she makes way more money. But she, yeah, she just had to wait. She’s that’s the only thing. So if you wait, you get paid more. A lot of people don’t want to wait. They’d rather just take the money and put it somewhere else. But yeah, maybe she’s not in that situation. So anything I have a question, sorry, how I know that benefit for the seller. But how does that benefit you guys, if you’re paying more? So how that benefits us is we are buying a property with no money down, and we’re able to rent it out for what, let’s say, $2,000 so for an investment of our money, no money, right? Maybe some closing costs, we’re making $568 a month, right? Times 24 payment periods.
So we’re making $13,626 a month, minus expenses, like, if there’s anything we gotta take care of, right, on, like, a little investment, right? Does that make sense? Like there’s actually, like no investment other than the closing cost and maybe some things we have to put up? Plus, when. Sell the house, we’re thinking that in the 24 payment periods, when we sell it, we’re going to have to owe her 288, 750, correct? But we believe in two years that this house is probably going to be worth maybe 350 right? It’s because it would appreciate so this house, versus it not being a deal at all because we can’t afford to pay what she wants on a wholesale deal. We make in five years, potentially $13,000 in payments on investment with $0 plus when we sell it for 350 we pay her off, and we make the difference of 60,000 in two years.
Got it so you’re gonna your goal is to basically sell it before the balloon payment is up, or refinance out of it and keep it. But make the difference. You can do a cash out refi and refinance out and, you know, make some money if it, if it appraises for more. Okay, thank you. Does that make sense? That’s why a lot of people do this. Is because they’re like, Okay, if my balloon payments in 510, 15 years, I can refinance or sell the house when it appreciates. So that’s let me explain I did. I did this in Utah, so I bought that guy’s house from him. Nobody was willing to pay him 145 for it, like cash.
So I said, Look, dude, I can pay you 145 for your house, but I can do it in five years. Okay? I can balloon you out in five years, but I’ll just take over the payments until then, right? So things got a little squirrely, and he wanted to get paid out sooner, and I will it already appreciated. So I the house got appraised for 220 right when I got it, and I was able to cash out refinance and get, like, 180 for it. I think that was the number. So if I had to pay him out 145 and I got 180 I was able to get that cash back out of it right between 180 and 145 Actually, it wasn’t that much. But does that make sense? Yes. So that’s why people do it, because they bank on appreciation so and cash flow on an investment that didn’t cost you any money. So that’s why do you see how this is such a powerful deal in two years we could make even if you only made 20k in two years. It’s a little investment you make to cash flow and to make, you know, let’s just say 30,000 on something you were going to make $0 on.
Yeah, now maybe I’m jumping ahead, but who goes on title? So we would. So we’re buying it subject to so we we’re technically purchasing the property. She’s just holding the loan in place because it’s, she has a mortgage on it, so we’re, we’re buying it subject to and by the way, again, I’m not the professional to learn from. I just know how to make the offer. And I would just say to everyone, like, Hey, I’m not the seller finance expert, and that’s probably a good thing for everyone that’s watching. It’s like, you don’t need to be the expert to do seller finance deals. You just need a team behind you that can make sure you’re doing it the right way. That’s why I take this addendum, I fill it out, and I send it to my title company. I say, hey, is this all? Is this all legit? Did I set it up right? Like I asked them every time? No, you’re good. So I think it’s a powerful place, or it’s good to admit that, like, I’m not perfect, and I don’t expect to be perfect, you know, because I want people to have my back in case I make a mistake, you know, I’m saying, yeah, so and then you are trusting her to pay her mortgage.
No, so I’m not giving her the money. I we would hire a company that would make the payments for for me. So I can’t remember what it’s called, but there’s, there’s companies that you, you give the money to, and they pay the mortgage payment, and they pay her out the difference. Because if you just give her the money, she could just pocket it and just run. So we’re going to put a place. I can’t remember. I’m blanking, but it’s, it’s one of these, like escrow companies, or that pay, and they take care of all the payments, and they actually document. That’s the best way you want to do it. I think it’s a loan loan servicing. Can’t remember, but I could find out, because I have a slide for on it. But does that make sense? Yeah, okay, so the note is due in two years. Seller to pay homeowners in for the term. So, yeah, the seller keeps the homeowners insurance in place. Buyer to notify the seller when the current tenant vacates. Yeah, we want that too, because there’s, there’s tenants here, servicing company. Thank you, Alonzo, yeah, servicing company is what you would use to make the payment. Does that make sense? I had a question. Go ahead, brother, so AC include, let’s what the question again, Does, does he require any down payment to her? CC? Doesn’t want any down payment.
I said I wasn’t going to make her a down payment, and she said that was fine if I gave her asking price. So, oh, so no, no down payment required. Alright, yeah, and, and sometime, like most people that do, seller finance, don’t want to put any money down, or little money down, because the thing is, if you put money down, it kind of sometimes ruins the math on the deal and not making it a good investment. Because if you gotta put money down, you might as well just get a traditional mortgage, right? But it depends how much money they want down, like sometimes sellers want, like, 100k down.
So we’re saying right here, purchase price 300,000 so they’re carry back. She’s carrying this back. Let’s see payments. 1432, Alonzo says they send her to the payment. The money. That you pay in payments? Yes, alright, late fee buyer to be responsible for all property taxes, utilities after close of escrow, cool owner, owners, policy and all title fees paid by buyer, insurance will be set up to include the seller as a mortgage. E you probably, nobody probably knows what that means, but it’s it needs to be put in there. Payments begin the day after tenants vacate property. We want, I don’t want to pay if the tenants are, are there no due two years after close of escrow and a bloom payment, paying the remaining balance of 287, okay?
Because what it is, that’s what it breaks down to seller to pay homeowner insurance for the term buyer, to notify the seller when the current tenant vacates. Okay, that’s it. We send this over to her. That’s what this is, what it looks like. Now, if you sent this over and got it signed and you sent it to a title company, they would know exactly what to do. Thing that we missed, they could, they would figure out, right? They’re not going to close a title company is not going to close a deal unless it’s all tip top and shape, right? So this isn’t the only thing you need. You actually need a purchase agreement. So let me show you guys how to fill that out. But before I move on, is there anything any questions? Henry, yes.
So where can I fight this contract? It does in the mind map. It is in the mind map. You dang right, brother. So if you go right here, because you’re part of the club and part of the mentorship. If you go to step number six on negotiating and making offers, if you go to contracts, you have every contract you’ll ever need, creative financing, lease options, it gives you every contract for there’s a lot of different ways to fill out contracts, but I like doing the addendum, because that’s how I learned. But yeah, you get it all in here, brother. All right. Great. Yeah. Okay, so we have this, and now it’s time to download this and send it over to her for to sign. I’m going to call her because I don’t want to just send it, and hopefully she signs. I want to send it and go through with her and see if she has any questions. So we’ll see. So we’re going to go, we’re going to go to go to the docub. What is it? Panda, Doc, all right. Many of you ever filled out a contract? Let’s get it done.
All right, so we’re gonna go new document. Blah, okay, so this is my main real estate purchase contract. It’s battle tested, battle approved. Here we go. So I am the buyer and she is the seller. Okay, Noel. All right, continue. All right. So here’s the date we need, the property address, and there’s a lot of different CRMs that, like, you can put your contracts in and it will, like, automatically fill it out. But okay, so the deal purchase. So the purchase price is 300,000 right? But what we do is we we say, See addendum for terms, right? And then that’s how they know that this is we’re purchasing on terms, seller finance terms, right? So acceptance, I usually don’t add give them a due deal, acceptance period, because I don’t care if they sign it, they do or they don’t. Earnest money, I usually put, like, $100 down. And if they say anything, I’ll just say, look like we’re either going to buy it or not. I can put more money down. I just usually do 100 bucks close date. Let’s do honor before 331 because I think that’s the time they get out of there the current tenant. So, but maybe we can close sooner. I’m just, it’s honor before. Okay? And then we put the con the information. Okay, we’re going to delete that. We’re going to delete that. Okay, so this is buyer.
This is me. This is her shoot. This contract says Utah Home acquisitions. That’s the wrong LLC. Uh, whatever. It doesn’t matter. I can still buy it in the LLC. I can change it. I can just wholesale it to myself and change the LLC. Or maybe I can just cross it out. So I’m gonna, I’m actually just going to change it right now. It’s not look good, does it? I don’t care. We’re gonna go here, put that in there. Copy that son of a gun. Does this seem hard, Henry, or you feel like this is something you could do? Yeah, I think I could have you out of contract.
I mean, you got this, bro, 100% okay, so I’m gonna put my LC ventures of Nathan, Payne enter such a terrible LLC name. I made it when I was like, 20. Yeah, that’s a long name for LLC, horrible man. I know it’s terrible. So okay, can you able to to change the LLC name? It stuck with you forever.
I think it’s stuck with you forever. To be honest, I’m stuck, dude, I made a terrible LLC name, and I’m stuck. It’s all good, though. I don’t think people read LLC names and think anything of it. I’ve never been like, oh, wow, that’s a great LLC name. Okay, so it says this contract is made on blank between Noel seller, whose property is blank, and ventures of Nathan Payne and or, or assigns buyer. So that allows you to assign it, but I also say I’m going to sign it. Buyer may assign contract below see addendum for seller finance. All right, that’s it, Henry, what do you think? Man, look good to me. Looks good to me. Looks good to you. So we send this over to her, and then I’m going to call. Call her and read her, walk her through it, but this is only one portion of the contract. Yeah. So Alonzo, so I have a l i was doing business with my business partner, and now I’m doing business by myself. So this is our LLC that we did together. So that’s the difference, alright, so I’m going to send this, all right, we’re going to send that, alright? So that’s one we did.
Now we need to do another one, but I can sign my part part right here. Henry, you think she’ll sign today? I hope so. Yeah, see ya. See ya. See. Look like she doesn’t got a agent anymore. Well, it doesn’t, it honestly doesn’t matter if she has an agent, because this could be just done with us, like we wouldn’t be involved. Alright? So we’re going to go here. We’re going to go back. We have one more paper to fill out, so we gotta go now. We have to send the addendum, which is seller finance addendum right here. And I’m never too worried about making a mistake on paperwork, Henry, because again, you can always just fix it.
Let not a big deal, or you can catch it later. So I just want to let you know, don’t, don’t ever really trip if you don’t know exactly, if you’re filling it out, right. Okay, here we go. Alright, so we’re going to put the, we’re going to put all the fields in there. We’re going to put the date. This is the date that I sign seller, all right, so it’s me, and then I got my signature. Bada, bing, bada, boom. Let’s make this a little smaller. Okay, then we go her, we go signature, we go date, and then please print. Why not initials? I don’t like that. It says, Please print. I probably gotta switch that out. How’s she gonna print on there? She can’t write it, um, text field, signature, initials, date. Text field, yeah, maybe, maybe she just gotta write it out. We’ll go here. Text field, okay, alright, Henry, here it is. You ready? Let me read it one more time. So we’re purchasing it for 300,000 seller, carry back 300,000 I’m a little iffy on the seller.
Carry back if that’s the right way to say it, but we’ll see. Okay, if it’s not, it’s all good. Like I said, I ain’t the guru, but I know how to get it done. Payments of 1432, 4% interest, late fee of 95 not received on the third buyer to be responsible for our property taxes and utilities after close of escrow, owner policy and all title fees paid by buyer insurance will be set as a mortgage e payment begin the day after tenant vacates property, note due two years after close and a bloom payment, paying the remaining balance of blah, blah blah seller to pay homeowners insurance for the term buyer to notify the seller when the current tenant vacates the property. What do you think Henry, ready to send this off? Yep. Let’s get it done. All right, and in the CRM, because we are sending the offer, what do we do with the CRM? We gotta update the stage. So right here, we’re going to go to the stage opportunities. Offer was made. Oh, alright. I guess I already made the offer. This is already in that stage, so now I need to get it under contract. So I need to call her right now and see if I can get it done. You believe I can get it done live? Yep.
Let’s give her a call right now, Henry, because that’s what we do. We call. We go over the contract. You don’t you just don’t send a contract and just pray that they sign it, because that’s a waste of your time. You want to call and see if you can get it done. Mm, hmm, and sign it right there. Noel, how are you? I was wondering, do you have any questions for me about the agreement. I wanted to actually walk you through it to see if there was anything I could answer for you. Yes. Does that work? Yeah, so I would, I would need to do an inspection. I didn’t put, like, a due diligence deadline, just because I try to get it done like really fast. When do they when are they supposed to get out of the property? Did you say June? Okay, okay, March, 31 by noon. You’re saying, Let me we can always change the close date a little further out if we need to.
They’re supposed to get out by noon. Do you think they’d have a problem if I went in there just for like, an hour or so just to check it out before close? Yeah, yeah, I would, I would give them the exact date and time so they would know, yeah, so it wouldn’t be like, just randomly, we wouldn’t just show up. Yeah, no, I won’t do I won’t. I wouldn’t do that. So let, let me do this. Let me just let me on the contract. I’ll change your name. I will What else. I will push the date just a little back, just in case there’s any problems. But if we do an inspection, I want you just to check and just let them know, like it will maybe just say, Hey, I’m going to send some people over for maintenance, just so they don’t really care what’s going on. I don’t think they would even even care, because they don’t own it. But then we can go in there and look at and I wouldn’t, I wouldn’t mind closing sooner, and you can just forward me the payment, because if we if you want to get this.
On sooner. I mean, all I need to do is go check it out, and that’s and then we can be ready to go. Okay, alright, so I’ll just change that, and I’ll call you when it’s ready. And then I, if you, if you’re good to sign, then we’ll, we’ll start the process immediately. I’ll call you right back. Let me finish fix it. Yeah, so there’s just two documents. There’s the real estate purchase contract, and then there’s the seller financing addendum that just explains how we’re going to make the payments and and all those terms. Okay, let me, let me just double check and make sure it came back on my side, and I’m going to go take a look at these other properties that you have. Are you? Are you open on the other properties that you have? Are you open to selling those on terms as well.
Okay, so you said only one can be an installment payments. How come the other one can’t? Is it a Okay, so you need to just sell that one and get the money out of it. Okay, which one are, which one is. Are you able to do the installment sale with it? Okay, so either one gotcha, either one, but you just need at least one to be able to sell. What what other investments are you trying to do? Just so I know maybe I come across something that might work for you. Okay, so if I can find you through my network, if I come across anything that’s in Long Beach or Santa Ana or in California. You’re interested in those? And do are you wanting single family or multi family? Okay? And I’m just curious, because I’m an investor, obviously like yourself, what made you want to leave Florida and go back to California? Since you you were investing in Florida so much? Well, yeah, I get that. So as you’ve had, you’ve had a it’s just kind of, maybe it’s a little bit of a stress, since it’s all the way out of the other side of the country.
Yeah, that makes sense. I get that. Well, I go to Florida a lot for my job, so I think it’s a good, good trade off you. You give me terms and I’m able to pay what you want. And, yeah, we don’t work out and, and, like I said, I’ll look at the other ones. Are the other ones before I look at them? Are they listed? Are both of them listed on the market with an agent? So if I were to buy, if we’re to work together on terms, and we don’t, the agent doesn’t need to be involved, because we’re just working together. But if, if I purchase it, like, traditionally, like, through a mortgage or something like that, find traditional financing or even a cash I think the agent is there’s like, obligated, they’re obligated to get their commission and fee, but I don’t think so. If it’s through, like a installment. I’ll look at it. But this one that we just signed on, that one was not listed currently, right? You took it off. Okay? I think we can get past the other one on the installment and and, but so I might be able to help you on the other one.
But if you, if you can’t sell both on installment, you probably might just have to wait. Okay, well, look at it. Thank you, Noel. I appreciate your time, and we’ll be, I’ll be reaching out to you when we’re starting our due diligence, and I’ll tell you what time, and you just let me know what works best for you to reach out to the tenants and let me know. Have a good one. But wow, Henry, you did it, bro, you did it? Buddy, wait, did she sign it? Yeah, bro, she’s already signed it, right here. Look panda doc. Document has been signed. We just, we just signed an agreement. Let’s get it. Wow. How you feeling, buddy, wow. She fast. This is amazing. This is great.
