My Favorite Way to Invest in Real Estate

If you didn’t know, I do a lot of work with seller-finance real estate investing and I want to share with you the top 5 reasons why.

First, let’s discuss what seller-finance investing is.

It is a form of real estate investing by which I buy single family homes at a discount either from bulk rental portfolios or bank foreclosure portfolios as is. The company I work with on these does all of the heavy lifting in finding the homes, helping me purchase them, and doing the minimal essential repairs and clean-ups on the houses to make them sellable. At this point, I own the home, which is part one of this style of investing.

Part two is finding a family who wants to buy the home from me on a mortgage, similar to rent-to-own. The company I work with also interviews and selects families, puts the mortgage payment in place between the family and me, and manages the ongoing relationship and payments for me. With it being a mortgage, I’m not a landlord, I’m a bank. The family is responsible for their own maintenance and repairs and just like any mortgage relationship with a bank, they don’t ever contact me to come fix things or anything like that. They make the payment to live there and I collect the payment. Usually I am charging 12% interest on a 20 year mortgage.

Now that you have a bit more of an understanding of seller-finance investing, I want to go into the top 5 reasons I began investing this way.

#1: I don’t like the stock or bond markets. I don’t like the idea that shares of stocks and bonds typically don’t represent any sort of tangible or controllable assets. I don’t like the amount of manipulation that can occur with them. I don’t like the fact that particularly with stock, if the company goes insolvent, I’m the last one to get paid if there is even anything left. I want control and I want assets I can see. Seller-finance does that for me.

#2: I want passive income. Passive income is the route to financial independence. Yields on stocks are laughable and even the best ones are only going to yield 3–5%. Yields on bonds are low as well. I really like the idea that I can secure 8–12% yields on my investments and build that income stream up until I can cover my generosity, expenses, taxes and savings with it.

#3: I don’t want to be a landlord and I don’t trust private investment funds. I’ve always had an interest in real estate investing as a source of passive income. But the more I studied buying and managing rentals, the less interested I was. I didn’t want to wear the hat of a landlord and the alternative of paying 10% of my gross rents to a manager for them to do it, and then me still having to manage the manager didn’t sound attractive either.

The other option was private investment funds and a recent survey showed that about 70% of them fail. If you do even a little bit of googling on private investment funds, you’ll learn that the barrier to entry on opening and running a fund isn’t that high (anyone who can pay $10k to an attorney can start their own private fund) and that the industry is ripe with fraud.

#4: I like the idea of helping good people with my investments. Seller-finance real estate can be done in a way that really makes a positive impact. More than 50% of Americans cannot own a home due to income or credit limitations. This means they’re renting and the average rent is higher than a seller-finance mortgage payment. Enabling them to achieve their dream of home ownership not only creates more stability in their family’s life, but it improves neighborhoods, and as they live in the home it appreciates and they pay down their mortgage balance with me which literally can change their lives financially. I like to see other people win and I like it even more when I get paid to help them as an investment.

#5: Seller-finance isn’t going anywhere. Mortgages have been around since the 5th century B.C. It is the #1 way that banks invest (they are in the business of lending money and the one they are known best for is mortgages). And this level of predictability and consistency provides me with a stable place to put my money that I know will be around long-term. Many investors don’t know where to invest or have unhandled concerns about investing and this actually causing them to earn and save less because they don’t know where they’ll put investment money if they have it. Solving that problem means I don’t need to think about where my investments will go. I already know. I can simply produce the income, save and accumulate as much as possible, and then empty it into seller-finance investing to generate passive income like clockwork.

If you’re reading this and you’ve been interested in real estate investing but you’ve not felt comfortable buying rentals, investing in a fund, and don’t really want to spend more of your time doing it all yourself, then seller-finance real estate investing might really solve your problem the way it has for me and could be worth looking into.

In closing, my mission in life is to help good people build more wealth who make the world a better place.

So, if you’re a good person who wants to help make the world a better place and this article helped you, I want to encourage you to start planning your next quarterly trip and putting this into practice. And feel free to write to me and let me know how it went.

If you’re a client of mine and you’d like help leveling up, send an email to my team with “Level Up” in the subject line to [email protected].

If you’re a follower and have not read my book The Blueprint to Financial Freedom yet, that is the place to start. This book covers the specifics for each level in the various chapters and you can grab the book for free as my gift.

Click here to get a copy!

The Blueprint to Financial Freedom by Jerry Fetta

To Purpose, Wealth & Freedom,

Jerry Fetta

Jerry Fetta is the CEO and Founder of Wealth DynamX. He is a nationally recognized financial expert featured in Forbes, Yahoo Finance, Fox, Chicago Weekly News, New York Finance, interviewed on 100+ podcasts with world renowned experts, earning endorsements and affiliations throughout his career with names like Kevin O’Leary, Grant Cardone, Dave Ramsey, and Pamela Yellen.

Jerry’s mission in life is to help create millions of financially educated and solvent families achieving greater financial freedom and sharing the truth about money with those around them.

Learn more at www.WealthDynamX.com

(DISCLAIMER: The information in this content should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Wealth DynamX can and does not provide advice unless/until engaged by you.)