They always ask how much down

Hello everyone,
I’m doing owner financing now instead of lease-options…not my choice…Texas law.
I feel that I’m not reaching potential buyers. They call and ask how much a month, how much down and the price of the property.
I go through the …the monthtly payment depends on your downpayment etc,etc.
They continue to ask how much down…I know I’ve lost some, just because of this. The others of course are just tire kickers. But I feel I’m not doing the screening correctly. I’ve re-read through William’s course and about 5 more.
Remember I’m dealing with blue-collar homes. Not many have downpayment…at least not much. They think that 2K is a lot.
In my area, we have a new Wal-mart and lots of oilfield workers…in my experience I have found this type of person not to have good credit nor much down.
I guess the long and short of it is that I don’t want to go through the expense of taking a chance on them, wrapping up my house in an owner finance and then they flake out. MOST just want a rental…which is not in good condition when you get it back.
I do screen with a credit check and background check.
My problem is…I think I’m running off the good ones over the phone…OR…there aren’t ANY left with fair credit and a work history of over 3 months on the job!
I need ideas quick!

Great $uccess,

As far as credit checks go that will tell you what you need to know about potential renters. I have given discounts on rent in the past to people with good credit. Everyone wins. They’re happy to get the discount and I get a good tenant. For bad credit go with as big a security deposit as you can get, plus 1st and last. I think your market is telling you what it wants. Rentals! These people are transient, they have short employments histories, ect. If that’s your market go with it. I have rented property to this type of folk. Remember you WILL get dead beats. I have learned a few tricks to dealing with them. In the northeast it takes about 4-5 months to evict someone. With legal fees and related expenses I’ve found it cheaper to sit down with a tenent and offer them lets say 2 months rent to clear out in 7 days. You spend some money but it is MUCH CHEAPER than eviction. I tell them I’ll meet them in 7 days at the property if their stuff is cleaned out they get a check for $1000. If I go back on my word they still have a place to live, if they go back I start the eviction process. I’ve NEVER had anyone refuse this deal.

In Texas at least for a rental it’s about 2 weeks to evict. It’s the damage to the property I hate.
I guess I just hate having a new rehab be a rental.
DARN!! I wish there was a cross between a rental and owner financing…Ohh wait there WAS! Geez! Those darn policticians!

Dee-Texas, I am in Texas as well and stuck with this nasty lo legistlation. I am doing my first owner finance and am trying to decide how to handle taxes and insurance. Do you escrow for them or require them to do their own? I am leery of that because most of the deals I find are people that did not escrow and have several years of back taxes.



I’d definitely escrow them.

Is Texas a land contract or cash for deed agreement? Do you have a mortgage on the properties that you owner finance?

I don’t bother with credit checks or even employment verification anymore. There are only qualifications that I’ve found to be relevant: 1. Whether or not they have the down payment I require. and 2. How many questions they ask.

If they ask too many questions they are guaranteed to be trouble.

If everyone is asking you how much down, then it’s time you decide how much you want and start telling them. Forget what the courses say. 90% will say “You’re crazy!” but one person, one beautiful, perfect little buyer, won’t even bat an eye. That’s the one you want because when you place them in your home you will enjoy the peace that eludes most landlords. You won’t have to worry about getting the house back all beat up.

It doesn’t matter where you live MOST people don’t have any money to put down. Fortunately you don’t need “most” people, you only need one. I guarantee there is one person out there who has more money to put down than you expect to get, and will treat your property like it’s their castle.

Once you know how to handle buyers you will never again worry about not getting what you want in terms of down payment, monthly payment, price, etc. It’s all about attitude. It’s not that the right attitude makes you more successful at converting interest into closed deals. It’s just that with the right attitude you won’t notice the people who don’t fit your needs.


Here is my .02 cents:

I think you are doing the right thing by being extremely careful who you sell your property to. You are not in the “taking back foreclosures business”, but in the money business. Maybe more effective marketing will help.

Secondly, consider renting the properties that you have little or no cash into that rent for positive cash flow. The rest you could sell like you are doing.

Make sure you concentrate on deals that will work for your depressed market.

In Christ

So Doug, what do you normally ask for as a down payment. I am not sure I have hit on a number that fits other than to be sure it is large enough to cover some damage if I do have to take it over.


I think it would depend on your state and the foreclosure laws. Some states require 1 year of default before you can foreclose. Others are a couple of months. Some states have different laws for land contract (or whatever the state calls it). Usually, laws for land contract benefit the seller. So checkout your laws and see how long it’d take to get them out. That’ll be a big factor.

ckockler, usually about 4%. I’m lucky though I can get people out in 30-45 days on a land contract here in Ontario. Never had anyone cause damage (maliciously) but I have had some people that lived pretty rough.