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I often find investor’s that I meet across the country have one of two (or both) very important misconceptions about seller financing. Investors either think they know how to seller finance or that seller financing is not important in today’s market.

Unfortunately, the vast majority of the time I find both perceptions to be incorrect on the part of investors that I teach. At a recent 2-day seminar, I started off my seller financing portion by asking the attendees to raise their hand if they had a good grip on seller financing. I would estimate that at least 90% of the hands in the room went up.

I then asked them to put their hands up if they had ever done a real estate transaction involving seller financing. Only about 15% of the hands went up this time. I proceeded to ask who had done over 5 transactions with seller financing and their were less than 10% of the room. When I finally asked how many had done over 10 transactions, I had the only hand up in the room.

I was amazed to see that investors are willing to say that know seller financing when they are not doing seller financing. I personally believe that if you are not doing seller financing you don’t know it! Those that know it, do it. How could one understand this amazing tool and not use it? If we are to use seller financing we must first truly know it.

This is typically a 3-day subject by itself, but I want to mention a couple of the reasons most investors fail to get seller finacing. Please see my list below:

1. They don’t understand the principles of seller financing.

2. They are unwilling to truly understand what the seller/buyer’s needs in a transaction. The reality is that if we don’t know what someone’s needs are we will never meet them.

3. They don’t know how to explain the benefits of seller financing with out saying the words seller financing. Most people have a bad perception of seller financing. I never ask for seller financing. I ask questions like, “How would you like me to show you how to double your net worth in 5 minutes?” Or how would you like the same income you are receiving on your income producing investment for the next 30 years without ever having to property manage or hire property management again?” If you start with the benefits of seller financing, you don’t have to ask for it like everyone else and get rejected.

4. They don’t understand how to truly write up a seller financed contract.

5. They aren’t even trying to do transactions that way.

6. They aren’t partnering with investors (like me) that do seller financing to learn it better.

One of the main things I would like to focus on in this blog is how to seller finance. Follow along and you to can become an advocate and beneficiary of this great technique.

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