Slow Flipping Explained: The Seller Financing Strategy Most Investors Overlook

Heather Blaise (00:00)
I also don’t really like doing the whole traditional fix and flip where you have to put a whole bunch of money, get the loans, right? Construction loans, all that stuff, take all all this time, energy, effort fixing the property up and then turning around and selling it, you know, hopefully for a profit. And so I stumbled on this about a year ago and I was just like, “This is perfect,” because it’s basically you’re buying a property for about 30,000 down, and then you’re flipping it immediately as is. The house is, you know, livable. It could be like a hoarder special if you want to picture it that way, but no major like foundational issues, electrical issues, no leaky roofs, things like that. Like, it’s— it’s gotta be livable.

Cody Crabb (02:15)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’ve got Heather Blaise with me. Heather is the owner of Blue Horizon Acquisitions, and she’s using a creative finance strategy called slow flipping, buying affordable yet livable homes and helping buyers become owners through seller financing. We’re going to break down how that works, who it helps, and why Heather likes it better than traditional rentals or fix and flips. Heather, thank you so much for joining us today.

Heather Blaise (02:41)
Yeah, thanks for having me.

Cody Crabb (02:42)
So I’m excited to get into this. It’s kind of an interesting strategy. You— we talked a little bit about it before, but I’m excited to ask some questions. But first of all, I’d love for you to introduce yourself for people that don’t know you. You know, how’d you get into real estate and what— how did you get to the point where you’re at today?

Heather Blaise (02:57)
That’s a long story. I don’t know if we have time for the whole thing.

Cody Crabb (03:00)
The— the— the— the abbreviated version.

Heather Blaise (03:02)
The abbreviated version. I started back in nineteen ninety nine, in Canada actually, and I bought my first property with no money down, believe it or not. I don’t know if I’m gonna get into all those details, but if you want to reach out, I can tell you that story too. It’s really cool. The second one, again, no money down, very creative, and then went on to build a twenty million dollar portfolio over five and a half years. Eight different states and in Canada and fifty five plus properties, including a hundred and eighty-eight room hotel in Oklahoma City at one point that we converted from this like truck— truck stop to a little boutique hotel outside of Oklahoma City. A lot of work, but super great experience. And then after the crash, pretty much lost most— well, not most of it. We saw it coming, so we sold a lot of it, but we were left with about five properties, because it was— it went way faster than we thought it was gonna go. And anyway, then through a divorce I had to sign over those five properties to my ex-husband to get him to sign the divorce papers. So, let’s see, that was about— I’m starting from scratch again and I found this new strategy that I absolutely love because I don’t like becoming— I don’t like being a landlord if I don’t have to be. I don’t wanna, you know, be fixing broken toilets and dealing with—

Cody Crabb (04:11)
Yeah.

Heather Blaise (04:24)
—rent payments and all this stuff. And I also don’t really like doing the whole traditional fix and flip where you have to put a whole bunch of money, get the loans, right? Construction loans, all that stuff, take all all this time, energy, effort fixing the property up and then turning around and selling it, you know, hopefully for a profit. And so I stumbled on this about a year ago and I was just like, “This is perfect,” because it’s basically you’re buying a property for about 30,000 down, and then you’re flipping it immediately as is. The house is, you know, livable. It could be like a hoarder special if you want to picture it that way, but no major like foundational issues, electrical issues, no leaky roofs, things like that. Like, it’s— it’s gotta be livable. And you buy it for 30,000, and then you turn around and you flip it to what we call a tenant buyer for about 90,000, and then they would put about 5,000 down as a— as a down payment, just like you would with a bank. And then they would basically rent to own it over 30 years at a thousand dollars a month or whatever, you know, those are flexible numbers, but that’s just to give you an idea of the overall formula. Right. So, so when you do that, like if you look at a lot of rentals out there, a lot of people are, you know— if you’re looking at like Missouri, for example, that’s one of the markets I’m in, a lot of people will get maybe something for a hundred and fifty thousand, you know, that’s— that’s nice. And then they’ll still only be able to rent it for about a thousand bucks a month. So the— the numbers work out really well with the slow flip. And then there’s no fixing it. You’re selling it as is. So they have the opportunity to own a home that they might not have been able to qualify for with the— with a bank with traditional mortgage, right? A— a bank’s not gonna lend on thirty tho— or a— a mortgage on thirty thousand. You know, they’re— it’s just too low for them. They’re— and then these people probably don’t have the best credit, but they have a job, you know, and maybe they’ve had a job for— for a while, but maybe their credit isn’t good. So they wouldn’t be able to qualify for a traditional loan. So we—

Cody Crabb (07:26)
I was thinking about like self-employed people that have— yeah, have a hard time too. Yeah.

Heather Blaise (07:30)
Mm-hmm. Exactly. Because I mean, for even for me, like I can’t— I’ve been self-employed since two thousand and three. I do all the deductions. So it looks like I don’t make a lot of money. Yeah. So when I go to the— right. So even my house here in California, I bought it on subject-to. Sub-to, actually it was a hybrid. It was sub-to and seller finance. So it was a million dollar property. I bought it with forty five thousand dollars down, took over the mortgage, sub-to—

Cody Crabb (07:42)
Like that.

Heather Blaise (07:57)
—at a three point eight five percent interest rate, which was the asset in itself, right? So there’s all these different ways of doing it. And I love real estate. I love being creative and using other people’s money when— when I can to leverage. Why not? Anyway—

Cody Crabb (08:11)
Yeah, yeah, sounds great. One of those things that’s as good as it sounds, I think, when you— when you use other people’s money to buy assets for yourself. Yeah, that’s— that’s—

Heather Blaise (08:19)
Yeah, it’s just a w— different way of thinking. Like a lot of people aren’t used to thinking that way. So it was like, “Okay, let’s create a win-win situation for— for the seller.” So I don’t know if we’re gonna get off topic though if I talk about this deal because it was— it was going into foreclosure and I saved it from foreclosure two weeks before it was going to the auction block. Got this seller seventy thousand more than she would have got if she were to sell it traditionally, which she wouldn’t have been able to do anyway, ’cause it was going to the auction block. Anyway, getting off topic, but—

Cody Crabb (08:53)
No, no, I think that’s cool. I think this is a really— I love when— when we can talk about like kind of new strategies or new ideas that people have never even heard of before. You said this is something that is not maybe the most widely done thing. So if you could just kind of— I’d love it if you could break that down a little bit for me. So like, it sounds like you have a very narrow criteria of properties that you can— can look at. I’m thinking of my area, I mean, you’re talking about a thirty thousand dollar property. That sounds like nothing to me. Like yeah, I live in Salt Lake City. So that— that buy— that would buy you like one square of a— one square tile of a sidewalk over here. Right. So I’d be curious to know like, what do you have to— where do you have to look for these things and does this scale? Is there a— is there a version of this that works in other markets too, just at a bigger— you know, with bigger numbers?

Heather Blaise (09:39)
Yeah, for sure. So it’s— I mean, there areas where it’s not gonna work, like California, forget it, probably Salt Lake City. I’m not sure. I haven’t looked at it. But it’s working for me right now in Illinois, Missouri, Ohio. Those are my three focuses. Because they’re landlord friendly, preferably not Illinois, but it’s just this mastermind that I’m a part of. They’re actively buying, selling, filling, like filling with the tenant buyers in Illinois. So it’s just easy to pick up properties in there because they’re all— they’re just like available. We have a section that’s like “available properties,” you know. And then we’ve got like boots on the ground, we call it, people that can go because I’m in California. I’m not going to fly to Illinois and look at it. There’s trusted people in that group that are there that will go and walk the property, take detailed photos, make sure it is what it actually is. And for— here’s a good story too is I actually put an offer in on a place on Thursday, last Thursday. And it was marketed as two bedroom, two bath, two-car garage. Here’s the photos. I’m like, “Okay, yeah.” For— and it was twenty five five and I offered seventeen thousand. And then I got my boots on the ground to go there. He did a thorough walkthrough, pictures of everything. The two-car garage was burned down to the ground. So that’s not there anymore. Right. It was just in total hoarder special like— and the pictures that they put up didn’t look like that. Like it looked really livable. And it is still livable, but it’s way worse than what it actually was— what—

Cody Crabb (11:47)
Like you probably wouldn’t have even offered what you did in that case. Yeah, that’s—

Heather Blaise (11:51)
Yeah. I mean, yeah, I still would have probably gone in there, but I found it outside of my mastermind group in another like Facebook group. So I know you were— you were saying, like, “Where do you find these properties?” right? So there— you can look at Facebook Marketplace, Facebook groups, Craigslist, and even Zillow. I’m on Zillow every day looking— looking at different properties. They just pop up, right? You put your criteria in and you know the places that you want to focus on. But it’s a strategy, it’s a formula. There’s— like, you’re looking for certain types of properties and certain types of— in certain states. And I recommend landlord friendly because you— it’s— they’re purchased on a contract for deed with tenant bu— from tenant buyers, right? Or depending on the— depending on the area. And so you really have to have the right contracts and everything to make sure that you’re protected and you mitigate your risk and— and things like that. But the group that I— that I joined, it’s full of, you know, a thousand plus members and we’re all doing the same thing and we’ve got our mentor that’s been doing it since two thousand two. So it’s been around a long time. I just never heard about it and most people haven’t heard about it. And it’s a really low competition ’cause most people haven’t really heard about it. They’re doing the traditional fix and flip thing, right? So these are all the reasons why I absolutely love it. And then I have my own cash to purchase about six this year. And then I want to scale it to about 20 to 40 over the next five years. So I’ve got some investors that have— that are lined up. So when I use my own cash, I buy it for 30, I get a hundred percent of the income on a— on a— on the month to month basis, and I get the deposit.

Cody Crabb (13:16)
Yeah, no.

Heather Blaise (13:41)
But once I start using investors, investors will get 12% on the 30,000. So I would borrow 30,000. They would get a 12% return on their 30,000 over a five year period. So they get a check every month for 667 something over 60 months. And by the end of that 60 months, they’re completely paid off and made 12% on their money. And it’s backed by the real estate. So it’s super secure. So that’s what I plan to do. I won’t get as much of a cash flow monthly because if I’m paying them six sixty seven every month and you know, I’m only able to collect, let’s say, nine hundred, right? I only keep that difference. But after five years, I own it free and clear. I get the whole amount and basically that’s my retirement plan.

Cody Crabb (14:32)
Yeah, gotcha. Well, that’s cool. I— I— that’s— I love that you laid it out like that because that kinda gives me a better picture of— of how this could work. So for someone that— this is— this is the first time they’re hearing about this, they’re a little newer to the concept, you know, how— how does this work? So like, I— the— the with the— the way that I have heard about contract for deed is you think of yourself as the bank, right? So you’re not— you’re not the landlord, you’re not the, you know, you— but— but you still technically are renting it out to them because you’re the bank, right? So let’s say somebody— somebody starts to not pay their rent. Like, give me— give me an example of how that’s— how that tends to work and how it’s different than a typical landlord situation.

Heather Blaise (15:14)
Well, you’re like the bank. So if— if you stop paying your mortgage with the bank, what happens?

Cody Crabb (15:18)
Right, exactly. You get evicted, yeah.

Heather Blaise (15:20)
Of course. You get evicted, you get— foreclosed on, right? So the only difference is it’s not a foreclosure pro— well, there are some states that it— that it ha— that it is a foreclosure process. I can’t remember which ones, not— not the ones that I mentioned.

Cody Crabb (15:31)
But certainly that’s the— one that’s something to be aware of, yeah.

Heather Blaise (16:15)
It is something to be aware of. Yeah. But so then it’s a typical eviction. So that’s why I like Missouri because it’s a quick eviction, right? And then you just rinse and repeat. So let’s say somebody goes in, they put their five thousand dollar deposit down, they stay there for like two years and pay you a thousand bucks a month for two years, and then all of a sudden they stop paying. Well, then it’s like, okay, of course you’re gonna give them a— a lean, you know, a little bit of a— a time period just like a bank would, right? The bank doesn’t foreclose immediately. They’re like, “Okay, you’re late, you’re late,” you know. They start charging late fees and things like that. And then eventually they— they start the foreclosure of a 10-day grace period or something like that. Then you get a notice, then you get, you know, there’s steps that you take. But then you start the eviction process, right? So then once they’re out, then you do it again. You sell it again for ninety thousand. You keep whatever they’ve given you over the years, just like a bank would, right? And then you resell it just like a bank would. So another five thousand dollars down and another thousand dollars a month, you sell it for ninety thousand, give them a— a 30-year amortized loan. Most people stay on average five to ten years because what they do is they’ll move in, they start fixing it up, the place, then they— they’ll sell it, right? So they’ll pay you the ninety thousand and then they’ll keep the difference. So let’s say they fix it up like this one in— the one that has the— the garage burned down. If I do buy that one, they’ll— the ARVs in that area are around 140 to 160,000. So if I sell it to them for 90,000, they take maybe five years, you know, five thousand down, a thousand a month, and then five years of fixing it up. They could turn around and sell it for a hundred and forty thousand, let’s say, give me my ninety thousand less the principal that they’ve paid off, and then keep the difference.

Cody Crabb (18:11)
Hmm. Cool. Yeah. So really— it— it really does sound just like a win-win-win, honestly, because you’re protected because it— it’s— you’re like a landlord except for the fact that you don’t have to be a landlord in— in practice.

Heather Blaise (18:24)
Yeah, no fixing toilets, no like, “This happened, that happened.” It’s like, “It’s your house. You have to deal with it now. It’s your house.” Just like—

Cody Crabb (18:31)
Yeah. Anything. Yeah. I— well, and I like— I like the idea that— and they win too. I mean, this isn’t like some scummy landlord situation. I mean, you’re able to give someone a chance to own a home that might not be able to otherwise. And then like you said, it’s safer because then on the back end, if something does happen, if they want to pay it off early, sweet. Then you get this big chunk of cash. If they don’t want to pay it off early, sweet. You get it all the way in through— through and until their loan’s paid off. So yeah, I see— I see what you mean, this being a— a really kind of clever way to— to do this. Yeah. So if s— for somebody that’s listening who’s a little on the newer side, what’s something that maybe they should understand before trying a slow flip? That you would recommend they really look into? Besides maybe the— the local laws and things, because obviously that’s a huge deal.

Heather Blaise (19:21)
Yeah, well you also— you wanna set it up properly. So like, it’s under an LLC, not a personal name, things like that, right? You wanna have it— you wanna set up an LLC, and buy the house through the LLC or a land trust. So then you’re, you know, protected that way. They should also always do due diligence, like never trust that it’s— that it’s gonna— that it’s exactly as advertised, right? Go in to, you know, get somebody if you c— if you can’t make it, get somebody there that you trust to go in, walk it, take all the, you know, videos and, you know, photos so that you know what you’re getting into. For sure. And, you know, make sure that you check with— that it wasn’t condemned or something like that with the city. Like, there’s certain things that you want to make sure that aren’t happening. And then if all that looks good, then yeah, use the right contracts that are up to date or use a lawyer to make sure that everything’s drawn up properly. Or do what I did. Like, I joined this mastermind. Yeah, it costs— it costs money to— to join, but everybody’s super active in there. Everybody kind of has their own roles. And so you can, you know, there’s wholesalers in there that are actually getting the properties and then they’re making a commission on it. There’s people that actually fill the property. You just fill out a form and it’s like— the house needs to be filled and they’ll advertise it, they’ll show it, they’ll get— they’ll work— do all the paperwork that’s been reviewed by a lawyer every year to make sure that it’s up to date, things like that. So—

Cody Crabb (20:55)
Cool. Yeah. It sounds like the— this is one of those situations where if you— if someone’s figured out the formula, don’t— don’t feel like you have to do it yourself. Look at, you know— for the network is a— is a huge deal there. Well, before we wrap, so where should people go if they want to connect with you, they want to learn more about this, maybe even join that mastermind, where should they go online?

Heather Blaise (21:13)
Yeah, they can go— they can email me, I guess, at [email protected]. And just shoot me an email and say, “Hey, I saw you on the podcast.” And— and whatever questions you have, you can feel free to— feel free to ask me or if you, yeah, want to know about the— that mastermind. I don’t get anything from it. It’s just the one that I— that I joined. There’s several out there. And let’s see, what else? If you want to become an investor, I’ve got a presentation I can send you that kind of lays out what it’s all about. Because if you didn’t want to do all the due diligence, you know— finding the property, forming, you know, all this stuff, dealing with the title companies, dealing with the boots on the ground, changing the locks, doing all this that right and doing all the negotiations and then setting up the rent pay— the rent payments or the— not the rent payments, but the— the mortgage payments, I guess, right? All that. Like, if there’s still a lot that goes into it, but it’s a lot of upfront work. If you didn’t want to do all that upfront work, but you just wanted more return than a high interest savings account or, you know, losing three percent per month in leaving your money in the bank account, then— and this sounds like twelve percent sounds good, to invest in a property without having to do all that other stuff, then yeah. Feel free to reach out at [email protected].

Cody Crabb (22:43)
Perfect. Heather, thank you so much for walking us through this. I think it is one of those strategies a lot of people have never heard of, but once you explain it, it might be a godsend to find out this is a possibility. So thank you so much for sharing your story and your perspective today. And listeners, thanks so much for joining us today. Make sure you don’t miss another episode and we’ll catch you next time.