Passive Real Estate Investing TBT: Ask Marco - Buying an Owner Financed Property
Aug 21, 2025
Discover the strategic world of owner financing in real estate. Learn how to acquire cash-flowing properties with minimal upfront costs and the importance of long-term equity. Delve into the intricacies of financing terms, and understand when it's appropriate to pay full price. Explore seller motivations and the unique impacts on credit reports. This conversation is packed with insights for savvy investors looking to scale their rental portfolios and make smart, creative deals.
AI Snips
Chapters
Transcript
Episode notes
Buy vs. Hold Wealth Creation
- You don't always 'make your money on the buy' for long-term rental investing because appreciation and equity growth drive most wealth over time.
- Upfront discounts are icing; the real gains come from holding and equity growth over years.
Assess Loan Position And LTV First
- Evaluate seller financing by its position (first vs. second) and loan-to-value before deciding to pay full price.
- Prefer deals where the seller finances 80%+ with good terms because high leverage can produce outsized returns if cash flow is positive.
Leverage Changes The Return Math
- If you can get 100% owner financing with near break-even cash flow, the return on zero down is effectively infinite.
- Beware that zero equity leaves you exposed if you must sell immediately, so plan to hold for years to build equity.