How to land Contract
How To Buy Real Estate Using A Land Contract
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welcome back to this five-part video
series about how to structure and buy
real estate using creative financing
this is video three in the series and on
this video I'm going to show you
everything you need to know about
structuring and buying real estate using
a creative financing strategy known as a
land contract or contract for deed get
ready to learn what it is the pros and
cons and how to use it to make money in
real estate coming up hey it's Geryon or
the nation's leading expert on flipping
real estate and if you're new here to
make more money and less time flipping
real estate so you can live your dream
life subscribe to my channel click the
bell I kind of get notified when new
videos are released just to clarify so
there's no confusion mortgage states use
a land contract and trustee states use a
contract for deed but it's basically the
same thing for ease of use on this video
I'm gonna just use land contract a land
contract is another form of creative
financing and it's a type of seller
financing if you remember from video 2
in this 5 video series seller financing
is when the owner sells you the property
on terms and carries or finances some or
all of the purchase for you and by the
way before I forget all of the links to
the videos in this five-part video
series will be in the description box
below as they're released so you can
watch them later now a land contract is
similar to regular seller financing
except unlike regular seller financing
with a land contract you don't actually
get the legal title to the property
until after you meet the terms of the
contract and pay off the balance owed to
the seller once paid in full you get the
deed but in the meantime while making
payments on the land contract you the
investor have what's called equitable
title to the property this means the
owner can sell the property to a third
party or subject the property to a lien
or encumbrance that would interfere with
your interest in the property now the
way that you protect your equitable
title is by filing with the city or
county what's called a Memorandum of
land contract this is an abbreviated
legal document referencing the land
contract itself this memorandum serves
to put the public on notice of the
buyers interest in the real property
without the parties having to publicly
disclose and record the full land
contract in all of its terms including
price so if the seller were to try and
sell the property
the
memorandum of LAM contract would pop up
in a title search clouding title and
preventing the owner from selling so
let's discuss the pros and cons of a
land contract but first today's video is
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in the description so what is the
benefit of using a land contract well
first of all just like with pretty much
all creative financing strategies if
structured property and under the right
circumstances a land contract is a
win-win for both the seller and the
buyer investor as an investor a land
contract allows you to buy a property
with little to no money down depending
on what you structure and do it without
coming up with all of the cash for the
purchase price and without having to
qualify for conventional bank financing
giving you the ability to do more deals
a land contract benefits the seller if
he's willing to wait to get paid because
he usually can get a higher price and
he's also able to collect interest on
monthly payments so why would a land
contract be used instead of seller
financing the real benefit of a land
contract is it's a lower risk structure
to the seller remember with a land
contract the seller retains ownership to
the property until you fulfill the terms
of the contract with regular seller
financing the buyer takes title to the
property and in the event of a default
where the buyer stops making the
payments the seller would have to follow
the legal foreclosure process which can
be lengthy and expensive with a land
contract in the event of a default the
process is much simpler the seller would
file a court action called a land
contract forfeiture in which the buyer
would forfeit all of the money paid to
the owner including any down payment and
the equitable interest would be
terminated so the owner would get back
the property here's the bottom line
seller financing gives the buyer more
control and the seller less control and
the land contract gives the seller more
control and the buyer less control so if
you can choose pick seller financing but
really the only negative impact it would
have on you as the buyer is if
you were to default on the contract
everything else is the same so either
one is a great creative financing
strategy or investors when it comes to
making an offer to buy using a land
contract strategy follow my two-step
process covered in video one of the
series which you first make an all-cash
low offer and then follow up with a
higher creative financing offer this is
how you quickly discover if the seller
is willing to take more money later
create a financing or if you wants less
money now cash also when negotiating and
structuring the deal remember the three
most important terms other than price
covered in video 2 in this series which
is down payment interest rates and
maturity or when the due date is to pay
off the land contract in full now I hope
you learned something on today's video
if you did show some love hit that like
button right now and leave a comment let
me know your biggest takeaway I'd love
to hear from you and if you haven't yet
subscribe to the channel I'm dedicated
to helping you make more money in less
time flipping houses so you can live
your dream life and finally this was
video 3 in our five-part video series
using creative financing to make money
in real estate be sure to watch the next
video in this series where I'm gonna
show you how to buy real estate using
the subject 2 strategy now this is usual
when the seller has an existing loan on
the property so watch that video now and
remember it's not about the money it's
about having the time and freedom to
have me do and give everything you want
in life that's what it's all about and
I'll see you on the next video
