Unlocking Real Estate Secrets: Seller Financing Explained by an Expert

Dylan Silver (00:00.93)
Hey, folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, I have a real estate broker, CEO of Guided Path Realty out in North Carolina, Nicole Anglin. Nicole, welcome to the show.

Nicole Anglin (00:15.478)
Thank you so much, Dylan.

Dylan Silver (00:17.472)
It’s pleasure to have you on the show. always like to start off at the top by asking folks how they got into the real estate space.

Nicole Anglin (00:25.73)
So I’ve always loved real estate and I followed the market for years before I actually became a realtor. I was in social services for 14 years before I switched to real estate. And the thing that kept me out of it was the variable income. That’s the scary part, right? Is that you’re not guaranteed that paycheck every month. But then we moved to North Carolina. We were in a position where we could go several months without income.

And so I thought now’s the time to do it. And I got my license in March of 2022 here in Raleigh. And I’ve been an agent ever since, absolutely love it.

Dylan Silver (01:04.492)
What was the experience going from social work to being a broker?

Nicole Anglin (01:11.606)
It was actually overall very simple because what you use in social services, problem solving, creativity, people skills, deescalation skills, explaining things, that all translated very nicely to real estate. The part that was difficult was marketing, right? Because I never had to market before. So that was the piece where I needed the most support and the most growth and learning. And of course,

learning all the rules around real estate, what’s legal, what’s not legal, so that you’re making sure you’re not going to real estate jail.

Dylan Silver (01:47.566)
That’s right. You know, or actual jail in some cases. mean, I don’t realize this, but I had an attorney on here who very eloquently explained that if you’re doing syndications, that these are securities and therefore it’s securities law. So, you know, these are serious crimes if you defraud your investors. So one of the interesting things that I don’t think people are aware of is there’s just so much

Nicole Anglin (01:51.115)
Yeah.

Dylan Silver (02:17.198)
risk really when you’re raising capital unless they’re your equal partners in an LLC. But what I wanted to pivot and ask you about was you mentioned you do a lot of seller financing. And how did that come about?

Nicole Anglin (02:33.516)
So I actually went to a training given by a friend of mine who’s also a realtor, Megan Black, she’s amazing with LPT. And she also does seller financing and gave me the idea. And then I had a deal early on where the client had mostly, most of the cash needed to make this transaction work and they were short $20,000. They could not qualify for a regular loan. And I thought, seller financing.

And so we worked a deal out for that last 20K to be paid over four years at 3 % interest. And I was like, this is awesome. It was a much easier transaction. You’re not dealing with the appraisal and underwriting. And it’s also much cheaper to close because you’re not having to pay all those lender fees, right, as a buyer. So that was awesome. And then I just started looking for them.

Sometimes the seller financing deals are actually advertised on the MLS. I checked just the other day and there was 31 in our MLS advertising that they either would carry the loan or may carry the loan. So you can start that way. And then also if houses are not turning over, they’ve been on the market six months, I approach those folks and have that discussion. Are you interested in seller financing?

This is kind of what it would look like. It can benefit you because you can end up, you know, getting more money out of your investment if you’re willing to wait a couple of years for the full return. So that is kind of how I go about that process. And I’ve had several folks who could not qualify for traditional financing still be able to buy a house. I literally and I don’t know anyone else in my area who’s done this. I had clients who were getting foreclosed on on a house they owned.

They literally moved right into the next house they purchased with owner financing. So you can make just about anything happen.

Dylan Silver (04:31.384)
Now, how is the transaction done logistically in these seller financing cases? Is it like people making Zelle payments? How does it work logistically when a seller financing deal happens and you’re paying the original seller over time?

Nicole Anglin (04:50.242)
So you can give payment a variety of ways. A lot of folks will just set up, you know, an ACH monthly transaction that goes out every month. There are also companies, I found two that are licensed in North Carolina, and I’m sure it’s different by state, that will service the loan for you. They’re essentially just like the loan servicer for the bank, except the bank is the seller, right? And…

It’s about $25 a month, which usually if my buyer is gonna use that service, I have them pay for it. And that’s kind of a bonus to the seller. Hey, this is gonna be tracked by this legal entity. They’re gonna make sure that, you know, all the payments are done. My client’s paying that $25 fee every month. If you had to be, the house had to be foreclosed on, which no one ever wants, but you can’t make a guarantee that your client’s gonna pay forever, because we don’t know that.

then that entity will actually do the foreclosure process on behalf of the lender, which is the seller, right? So, go ahead, sorry.

Dylan Silver (05:55.15)
No, that sounds great. How do people find these companies?

Nicole Anglin (05:59.424)
So I just found them through Googling loan servicer for private loans. And I can grab a couple links and send them to you afterwards if you’re interested about the companies that do that here in North Carolina. Again, I don’t know how many states they’re licensed in, but I’m sure it’s more than just us.

Dylan Silver (06:19.374)
I mean, I’ve done and considered doing seller financing. I shouldn’t say done. I’ve considered doing seller financing on so many occasions. But this was a point of pain for sellers as well. I don’t want to be responsible for tracking someone down and so on and so forth and logistically. And you would think it’s kind of a cliff note. But actually, now that I see it more clearly, especially as a real estate agent,

people just kind of want to wipe their hands with the payment portion of it and it’s extra work for them. So having some type of loan debt servicing third party service, I didn’t know that that existed for seller financing. That’s great to hear.

Nicole Anglin (07:03.862)
Yeah, and it really does take the pressure off the seller because then the seller is not the one having to go after that buyer and talk to them directly. There’s an intermediary, which a lot of folks like. Some people still decide not to use that company and they just work directly with each other. That’s also fine. And then, you know, they’re just having to track the payments. But what I do is I print out an amortization schedule for every deal that I’m doing, right? No matter what we decide.

Attach that as an addendum to the offer to purchase and then the contract so everyone can see exactly what’s supposed to be paid when. Now if they get off of that and they pay more, they’re gonna have to figure out their own amortization schedule later on, but I do set them up with that initially so that they know where they’re gonna be at the end of their loan period, whether that’s one year, two years, 10 years. The longest one I’ve done so far is 10 years.

which is rare, most sellers want to turn over that seller financing in two years or less, but I’ve had some folks agree to longer terms.

Dylan Silver (08:11.374)
Now, when you’re scaling a business in the seller financing space, I imagine that there’s, it’s a pretty granular niche, right? There’s not too many people I would imagine involved in this space. And so once you do one deal, are you getting referrals from people? Are you saying, hey, I did this deal, this person is sending me this person. Cause I’m imagining if I’m struggling to get approved and then I find a real estate agent who specializes in seller financing, I’m going to tell

everybody that I know who’s in a similar spot, hey, you gotta go to Nicole, you gotta go talk to her and ask her about this special financing that we got set up.

Nicole Anglin (08:50.87)
Yeah, I definitely get referrals and then I get a lot of my business from social media. And just recently someone had posted in a group that they were struggling with getting a loan. They were looking for some creative ideas. And so I reached out on that post and said, hey, I do owner financing or I specialize in owner financing. I’m happy to chat with you about it. And from that actually three people reached out just from that post because they were interested.

Yeah, I mean, it’s really up to the seller what they’re willing to take on and you don’t have to meet any criteria like you would for a traditional lender. So like in the one case where the folks were being foreclosed on, that seller actually agreed to 7 % interest over seven years. We amortized on a 40 year schedule so that my folks could afford it, right? And then…

that seller even paid my commission, because my folks didn’t have anything. So they ended up buying that house and they only brought 2,500 to the table for that deal.

Dylan Silver (09:53.966)
So for the sellers, when it’s not listed on the MLS as a seller finance, the motivation I would imagine has got to be that the home has been sitting there. But is there ever varying motivation? Is there other motivation that comes up, or is that really the main motivation, is the home’s been sitting on market for a while?

Nicole Anglin (10:17.398)
That’s the main motivation. Usually if a seller is interested in doing seller financing for the purpose of using that investment to make more money over time, they advertise that upfront. So those are the 31 listings that are already in there that say, hey, for the right deal, we’re willing to do owner financing. Most other sellers have never thought about it or don’t even know it’s possible. And they’re doing it because the house has been sitting on the market for a long time.

So I always, when I’m doing my searches, if I know someone can’t qualify for traditional financing, I look for the oldest house on the market. And it doesn’t necessarily mean it’s a bad house or it needs a lot of repair. The house that these folks got, you it just was in an odd location and it was, you know, in an area that wasn’t as popular. So it had been sitting for a while. And I said to the seller who had not even considered owner financing, hey,

you’re getting no money for this right now, it’s empty. And of course it was through their agent, they had their own agent. Would you like to get some money for this, you know? And they were like, yes. So we ended up setting it up. So they’re gonna actually make more than they would have had they just sold the house outright.

Dylan Silver (11:34.338)
I think that’s the biggest benefit of seller financing is if someone is struggling to get approved and then you have a seller who may have a home that’s sitting on market or they may want more than what the market is going to bring. Seller financing is kind of that win win because the buyer is able to get into a place where they otherwise would not have been. They’d have to continue renting. and then the seller is able to get more than what they would from.

traditional listing because the buyer is in a tough spot. They’re willing to pay a little bit more over time. And honestly, too, one of the things is you don’t feel it as much if it’s not coming out all at once. If the cash is sitting in your bank account, you’re thinking, well, sure, I’ll pay a little bit more than market value because it’s a drip. It’s not all at once. I want to pivot, Nicole, and ask you about the market in general out there in North Carolina.

I’ve had a couple guests in the Carolinas and it’s made me realize I gotta go check out the Carolinas. I’m from New Jersey, how come I haven’t been down there? And it just seems like a lot of great places to raise families and then also a good place for real estate investing too that sometimes doesn’t get talked about as much as some other places.

Nicole Anglin (12:50.87)
Yeah, we absolutely love it here. We moved here three years ago from Oregon and I would never move back. I am a North Carolina girl. This is where I want to live forever. And the real estate market has, I will say, softened some, right? It’s still very active. We’re seeing more of a balanced market now, whereas, you know, during COVID and right after COVID, it was a heavy seller’s market.

So I think right now it’s actually a great time for buyers to get out there and get in the game. Yes, interest rates are high, which is always the concern. However, what I explained to folks is right now there’s less competition. Sellers are more willing to work with you, give concessions, maybe do some repairs. In North Carolina, all real estate is sold as is. That’s what our contract says. And during COVID, sellers were not.

willing to do anything. They’re like, hey, take the house or don’t take it. I have 10 buyers lined up behind you. Do you want it or not? But now with the reduction in competition, sellers are incentivizing things. I just did a deal where my buyer got $12,000 in concessions and it was a regular financing deal. So I think now is an excellent time for that. And I also tell buyers, look, if you wait until interest rates drop, what’s going to happen? It happens every time.

is that prices go up because again, more competition. So you’re having to bid over list price to get that house. Get the house now, lock in the price, and then whenever interest rates come down, refinance. And I do say to folks, don’t be house poor, right? So I don’t want you taking this loan on if you can’t make those monthly payments comfortably and you’re not gonna feel good about it. But if you can afford those monthly payments, it’s comfortable for you.

and you can refinance in one to three years, however we’re looking at for our interest rates, then now would be a great time to do it, especially if you’re renting, because rent is 100 % financing, right? You’re just giving away all your money, you’re 100 % interest. Like here, I’m giving away all my money to the landlord, you know?

Dylan Silver (15:00.28)
Yeah, you know, think definitely being house poor can be a situation that a lot of people are facing. But also you have the situation of conversely, you could be rent poor. You could be paying a bunch of rent and then you’re still, you so it’s like, well, I got to pick one. I might as well have a place that I can at least build some equity and take advantage of appreciation. Nicole, we are coming up on time here. Where can folks go to to reach out to you, learn more about your business or get in contact with you?

Nicole Anglin (15:31.03)
Yeah, so if you Google my name, I try to be everywhere. My website is www.guidedpathrealt.com. I’m on Instagram, at Nicole.Sells.it, and I’m also on Facebook and LinkedIn. So feel free to look me up wherever. If anybody is interested in learning how to do owner financing or seller financing as a real estate agent, I’m happy to chat with you about it.

And of course, any consumers interested in learning more about it, I’m happy to have that conversation as well.

Dylan Silver (16:05.614)
I’m Nicole, thank you so much for your time today.

Nicole Anglin (16:08.32)
All right, thank you so much for having me on the show. I really appreciate it.