Owner Financing Deals With Annie Adkins | REI USA
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Owner Financing Deals With Annie Adkins

by | Mar 17, 2022 | Podcast

REU Annie Adkins | Owner Financing Deals

REU Annie Adkins | Owner Financing Deals

 

What are the things you need to know to start owner financing deals? Today’s guest, Annie Adkins, a Real Estate Investing Coach with over 50 rentals in her portfolio, tells us. Join in the conversation as Annie lays out three essential topics: finding sellers, what to say to them, and how to close deals. One way to find sellers is to tell people what you do. The more awareness grows around your service, the more referrals come in. Hiring a virtual assistant to help you with marketing makes it easier to find sellers. If you need more practical strategies for owner financing deals, listen to this episode.

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Owner Financing Deals With Annie Adkins

My name is Annie Adkins. My husband and I have been in real estate for quite some time. We typically do things together, but I told him that he was not allowed to come on. We teach every third Wednesday at 4:00 PM, so come and check us out. We have a coaching program with people all over the country. It is not just specifically Ohio-related that we teach. We would like to have you anytime you are available or want to check us out.

What topics do you all talk about?

Jay and I do pretty much everything in real estate. We do private money fundraising and coaching for real estate and life. We have written a book. We do fix and flips. We have 50 rentals in our portfolio. We have done vacation rentals. We got rid of most of those and we are looking for some more. We used to do vacation rentals for 8 or 9 years. We do buy, rehab, rent, and owner-financing deals. We talk about anything and everything. We do Q&A sometimes. If anybody has deals that they have issues with, we can go over stuff like that too. It is a little bit of everything sprinkled in there.

We have been in real estate for many years, which is crazy to me, but I didn’t think that it was even possible for me to be an adult for that long already. We have done over 500 deals total and we have taught numerous students. We have fourteen to do the same thing we do across the country. Whether it’s in Ohio, St. Louis, Missouri, or Birmingham, Alabama, it doesn’t matter. We do all things real estate. Our primary focus is Central Ohio, but I do have a countdown on my phone and have had it for quite some time. We will be moving to Florida when our youngest is old enough to go out and venture out on her own.

We have chosen to reach out and teach a bunch of people what we do because, in 2005, we had our own personal house. We had about six rentals and we lost everything to foreclosure. We had no idea what a short sale was at that point in time. Foreclosures weren’t happening until 2007 and 2008. We had nowhere to go to learn anything about what was happening or how to stop things. We don’t want people to be in the same position that we were back then. We focused our attention on helping develop a real estate business for people, helping sellers get out of difficult situations, whatever the case may be. That is our passion and why we do what we do.

What We Do To Find Them

I’m going to talk about owner-financed deals, what they are, how we find them, and all of the things. They are also called seller-financing deals, subject-to deals, or taking over payments for equity. Whatever lingo you use, they all mean the same thing. You are going to talk to a seller, figure out what the best option is for them and for their situation, and then figure out what fits best for both you and for them. The first topic is how we find them. We use Zillow. We check out all of the for-rent or for-sale-by-owner listings. We reach out to them either by direct mail, phone call, or email. We are finding them on Facebook and direct messaging them. It’s all kinds of different ways to reach out to sellers.

[bctt tweet=”Focus your attention on helping others get out of difficult situations.”]

We use real estate agents and talk to them about how many listings they have that are over 30 days old. Those properties don’t seem to be moving for whatever reason on the MLS. Maybe we can reach out to those sellers and offer them a different option. We use Craigslist a lot, which sounds crazy in 2022 to say this, but it works. We look for the for-rent people and for-the-sale-by-owner people. We use Facebook groups a lot. We go in and post regularly, “I’m looking for a house this week or looking to buy 3 or 4 houses in the next month or so. How can we help you out of a situation or somebody that you know?”

We have been in business for many years. We have talked to a lot of different people in a lot of different scenarios and settings. What we do is help people. We do a lot of Facebook Lives and Facebook videos of sellers that we have worked with and properties that we have taken over in different ways. The more you talk about what you do, the more people know what you do. Therefore, the referrals start coming in. The longer you are in the business, the better the referrals get as far as more often and frequency.

We use bandit signs. For those of you that don’t know bandit signs or what they are, this right here over in the corner, the image that I have there is a bandit sign. It says, “Sell me your house. We buy houses or distressed sellers wanted.” You work with them and tweak your message similar to the direct mail that Karen was talking about. We use call-capture phone numbers on different things. For instance, we would put a phone number on one of our bandit signs that say on our tracking system that this is a bandit sign.

We may use a different phone number for a Facebook post, an email, or something that we send out on Zillow or Craigslist. That way, you can track what marketing is working and isn’t working. Tweak your marketing so you are not wasting money on stuff that isn’t necessarily producing any leads for you. We do social media posts using those bandit signs sometimes. We might tweak the phone number to make sure that we are tracking it correctly in our follow-up systems as well.

What We Say To Sellers

We do use direct mail for many years. We have used Yellow Letters, which is a common term in real estate. We have used postcards and greeting cards sometimes, too, especially when we are reaching out to probate leads or something like that, because we do it a whole in real estate. The next topic I’m going to talk about is what we say to the sellers that we do reach. With our marketing, you do multiple touches. You reach out multiple times in multiple different ways, even if you would like and have the money to do so.

A lot of the stuff that we use are free, like reaching out to people on social media, Craigslist, or Zillow. Talking to agents doesn’t necessarily cost you any amount of money. We always use those techniques as well as buying lists and doing direct mails. It’s six of one and half a dozen of the other. It depends on whether you have any money to put into your marketing campaigns or time. That’s what we teach as real estate investors to our students too. If you have 5 to 10 hours a week because you work a full-time job, then you don’t have the extra money necessary to put into direct mail, but there are ways of finding deals that way.

REU Annie Adkins | Owner Financing Deals

Owner Financing Deals: The more you talk about what you do, the more referrals come in.

 

If you don’t necessarily have the time, but you have the money, then you can put money into your marketing. You can hire virtual assistants or part-time assistants locally to you to help send out marketing and weed through the list because we also take our lists, scrub and skip-trace them so that we get phone numbers and emails. All of this can be done for free or for you. It doesn’t matter. It depends on the amount of time and money that you have to focus on your real estate business.

We reach out to the sellers once we get those hot leads and say, “Would you consider taking payments for a bit before we buy it outright from you?” A lot of people have a number in their heads that they want for their property. They also have a bottom line of what they need to get out of their property. Sometimes, sellers don’t necessarily fixate on the fact that they have to sell now, especially if it’s a property that has been on the MLS for 30 days or more.

We talked to them a little bit and figured out their situation. We find out what they need versus what they want. We find out their timeline and pain points, “Is it a situation where they are on the verge of foreclosure? Is it a situation where they are tired of dealing with it?” We bought a property a couple of years ago for $10. I have the check to prove it. It was for $10, but the seller was distraught. It was a rental property for her and her husband, and her husband had passed away unexpectedly. She had a horrible tenant. She had dumped a bunch of money into rehabbing it and did not want to deal with it anymore. She was a local teacher and she was done.

She said she was ready to give it to the bank, but she didn’t even care at this point because it was so stressful for her. We said, “We will help you. We will take over the payments for you if you still have your mortgage,” which she did and then we put it in a land trust. We were 99% owners. She was a 1% owner. We took over the headache as far as she was concerned. We put a tenant-buyer in there and profited well. We paid that house off for her. She was super excited.

I can give you more for your house if you will be the bank for a little bit. There are some people that have this number in their head that they want for their property, but then they have a bottom line too. If you figure those two things out and then say, “I can give you top-dollar, but I’m going to have to have you hold the loan for a little bit for me,” you have to build the relationship with the seller. Make sure that you are upfront with them because we always say, “We will give you top-dollar because we plan on profiting from this as well. Why not both of us make some money? I can pay you for what you want if you would consider taking payments for your equity.”

If they have a mortgage, we take over the mortgage payment. If they don’t have a mortgage and it’s paid in full, then we offer them a monthly payment or a yearly payment divided into monthly payments so that the yearly number sticks in their head or the cashflow from that property is something that entices them. We also say that we will take over payments and be responsible for all repairs and anything that comes up, which is totally true. We do this with all of our creative financing deals.

[bctt tweet=”Be responsible and make things easy for the sellers.”]

We take over the payments or ownership of the property. We are responsible for all the repairs. We put an insurance policy on it. We are full owners as far as everything else is concerned. If there are holding costs, we cover them. If we need to put utilities on, they are in our names and we take all responsibilities. We always try to improve the property from the time we get it until we sell it to either a tenant-buyer or an outright buyer, so it always increases the value.

We also try to find a tenant-buyer that would do the same because you don’t want somebody to come in there and tear stuff up because then, it’s like a regular rental. You eat your profits up consistently into fixing things up. We always make sure that they understand that you won’t have to worry about anything concerning the house. It will be our responsibility. If it’s full of stuff and you don’t want to mess with it, leave whatever you don’t want there and we will take care of it. We are trying to make things as easy as possible for the sellers.

What We Do To Close Them

What do we do to close the deals? We try to make the seller as comfortable as possible. You have to build a relationship with them so that they feel comfortable talking to you about their wants and needs in the situation. Also, how could we best help them get out of the situation and help them have a better relaxing experience than what they have had before? We have a title search with a title company to make sure that there are no liens on the property that we are unaware of.

We check with local utility companies because the water bill goes with the property here in Ohio. If they had a tenant in there, they had never paid a water bill, and there is an $800 or $900 water bill, you have to take that into consideration when you are thinking about how much you are going to offer them. Whether it’s an outright takeover, payments for equity or whatever the case may be, you have to make sure that you have your bottom dollar as to what you need out of pocket. We do an inspection.

Jay is a licensed contractor here in the State of Ohio. He has done our inspections for many years. It’s not that difficult to find a home inspector to come in and inspect for you to make sure that things are good and make sure that you personally are checking the mechanicals of the house. If you don’t know if something is good or not, get an electrician or home inspector to check it. Have an HVAC guy come in and service the furnace and air conditioner to make sure that everything is working properly.

We review the mortgage if there is a mortgage on the property. We talk about if your mortgage is called due by the loan company, then this is what we would do. We would put it in a land trust and it stays in your name. You are a part-owner until that land trust is dissolved and the house is sold. We set up a land trust, which is similar to a land contract. It’s not the same thing, but it’s similar. We are 99% owners. The seller is a 1% owner. We record that at the recorder’s office to prove that Jay and I are owners of the record.

REU Annie Adkins | Owner Financing Deals

Owner Financing Deals: You can hire virtual assistants to help you weed through and send out marketing.

 

We get a new insurance policy set up with us as owners and the seller as a loss payee. If anything happens to the house, then we are both covered and the mortgage still gets paid off if there is one in place and everything is good to go. We did have an insurance claim on one of our properties that we had this set up in a land trust. It gets a little tricky if you don’t continue the relationship with the seller because the seller gets to cut the check. You have to figure out how that’s going to work.

Even if it’s a check-in once a month, you say, “How is it going? We wanted to let you know this is the situation.” Maintain a relationship with the seller until the mortgage is paid off if they have one or until they are paid off if they are doing equity payments. Once we close the deal, we mark it for a tenant or tenant-buyer. It honestly depends on what you want to do with the property itself. We have purchased single-family homes this way that we have kept in our rental portfolio. We have purchased single-family homes this way that we have no intentions of keeping them long-term, and it is different.

Every property that is a single-family home, we market for a tenant or tenant-buyer so that we can offer first-time homebuyers that are not quite ready to purchase an opportunity to have a house that’s their own that they can put equity into as well by fixing it up and doing some sweat equity. It’s what we call it. We do an application process so that they are filling out applications we do. It is not necessarily background checks, but we verify income and ask for references. It’s very much on the up and up. Everybody is fully aware of what is going on.

We do have a process of screening those tenants. We check for any kind of foreclosures on their credit or record. It’s any kind of record at all, whether it’s legal. We don’t do a credit check, but we make sure that their income is right and that they don’t have any derogatory marks of an eviction, lawsuit, or lien of any kind on anything.

We do have them consult with a mortgage lender and then figure out where their credit falls. It depends on how many people were in the house, how their job fits with that, and what they need to work on in order to get to a place where they can buy outright. We get a pre-approval letter or a letter of explanation from that mortgage lender as well to put in their file.

We do lease option agreements. It’s a lease but with an option to buy for tenant buyers. They are saying, “Yes, we agree to pay, for instance, $895 or $1,200 a month depending on the house. In two years, we will also have the right to purchase the house at a set price.” We typically set the purchase price on the high end of what the comps are because, in theory, we all hope that the real estate market continues to increase in value and not decrease. We can adjust that at the two-year mark or however long we set the agreement for.

[bctt tweet=”Spend more time planning for your life than your wedding and funeral.”]

Typically, the length of the lease option agreement is set based on what the mortgage lender consultation and letter say. We walk through those houses with the tenant. They walk through and we have a checklist as to, “What is the condition of the house? What is in the house appliance-wise or not?” It’s because we don’t always supply appliances for lease option properties, but most of the time, we do. We both agree, “This is what the condition of the house is. This is the condition that needs to continue to be in. If you move out, then we do a walkthrough move-out process too.”

One of the first things that we do to make sure that we know what is going on in what we are after as far as our business is concerned is to create a vision, “What do you want your business and life to look like?” We always talk a lot about vision because that’s one of our driving forces. A lot of people spend more time planning their weddings and funeral than they do their life. We take time to teach this to our students and do this with our family. Even our kids have a vision for their life. Jay and I have a vision for our life. That bleeds into what our vision for our businesses is. We have several businesses, too, because I have LLCs set up for each thing that we do.

Layout what you are after because what you are after ultimately determines how many deals you need to do, how much marketing you need to do, and how hard you have to work. If you figure out what you want in your life and put a price tag on all of the things, then you can figure out exactly how much money you need to make on a yearly and monthly basis to then figure out how many deals you need to make in order for that money to come in and for your vision to happen. We set an action plan based on those numbers.

Create a follow-up system, which is what Karen talked about in marketing too. We have a follow-up system for this, too, because no doesn’t mean no necessarily. It just means not right now. It could be that they changed their mind in three months, in a week, or in a year. We continue to follow up with those people.

Typically, after about nine months, we let it be until they reach back out to us. We always send them some emails, text messages, or whatever to say, “We are still here. We haven’t forgotten about you.” You can do that with spreadsheets or a notebook. You can do that with online software and tools like FreedomSoft, REI BlackBook, or REI Flippers. There are many CRMs and follow-up systems that you can create yourself or find online.

We set up a team and I don’t mean that people work for you. That is part of your team as well if you want to build this. It’s not ginormous but potentially a ginormous real estate business. I’m talking about setting up a team of agents to talk to about leads they have had on the market for longer than 30 days. You direct-mail people like Karen and other people across the country to pull lists and even set up your marketing itself on what works best and what doesn’t.

REU Annie Adkins | Owner Financing Deals

Owner Financing Deals: Fine-tune what you want versus what you need.

 

A title company agent or title agent does all of your title work. We always close everything through a title company because that’s how we close things here in Ohio. I know lots of places have attorneys too. It makes the seller feel more comfortable about the situation and that everything is on the up and up when you have an attorney that looks over all of your documents and a title company that closes all of your deals. When you work with other people in the real estate realm to create your team of people, it’s your go-to people for marketing, list pulling, and title work.

Reach out and network. Take the time to set up those relationships so that everybody feels more comfortable about what they are doing. Know what your market allows because there are a lot of places where wholesaling in particular, which is another realm of real estate that we deal with. Some people allow things with wholesaling and some people don’t. It’s state-determined. It’s not just people that allow it, but there are some title companies that don’t allow certain things as well. You need to know what your market allows and what you are allowed to do legally to help people get out of the situations that they are in. Know what you need to do, what you are going to do, how to do it, and then get to work.

You need to make sure that you have an action plan set. Have your marketing ready if you have money to throw at marketing. Know what your budget is for marketing every month so that you know, “I can send out these many marketing newsletters, Yellow Letters, postcards, bandit signs, or whatever you need to do.” There are a lot of places between all of the states that we have invested in, which are Ohio, South Carolina, and Florida. Some cities allow bandit signs and some cities don’t allow bandit signs. Some cities fine you for every bandit sign that you have. Those fines can range from $5 to $250 per sign and maybe even more. I’m basing it on my experience and what we have come across.

Some places allow you to put bandit signs out on a Friday night and not worry about them until Monday morning. In some places, you can put them out all over the place. It depends. You need to make sure that you are researching your market and area. You are making sure that you know what you can and cannot do and what you can and cannot get away with because we are not breaking any laws. We stretch some ordinances by putting them out on a Friday night and picking them up on Monday morning with our marketing tools.

It’s not that we would get in trouble. We would probably get a warning if they even saw them or they would pull and put them in the trash. You need to have that in mind when you are setting up a marketing budget, too, so you could potentially lose twenty signs. Do you have the money to replace those? Do you need to go after the Craigslist leads and the networking leads by working with agents? You’ve got to fine-tune what you want versus what you need, figure that out how to get to where you are, where you want to be, and how much money that’s going to take. It all comes down to what you have time and money for.

If you want to invest in your business with either one, you can hire all of this stuff done for you with virtual assistance or local assistance. There are lots of times when we start teams with stay-at-home moms that want to get out of the house for 3 or 4 hours a week. We have them put bandit signs out or start marketing with us for meetings with agents. That’s how our assistant Bonnie started with us. She was ready to get back into the workforce and she had ten hours a week to work, so we put her to work there. She has been with us for many years and has worked full-time since then.

It depends on setting up the right team and the action plan to get you going, knowing what to say and how to say it, and working on those relationships. Real estate can be as easy or as difficult as you make it. It’s what I have decided over the years. Jay and I are bestsellers on Amazon. We wrote a book that’s called Vision Focused Life. We used to be coaches for a group that’s called Lifeonaire. It’s very focused on having a vision for your life and business. We did well with developing a vision for our lives and businesses. We feel like that’s part of why we have been so successful over the years.

I know I talked a little bit faster than I was planning on, which doesn’t surprise me whatsoever. I have a little bit more time for questions or I can go over a few more things in more detail now that we are through it all. We offer a free checklist specifically about creative and seller financing deals.

Go.JayAndAnnieAdkins.com will take you to that checklist that we are giving away for free. Our website is JayAndAnnieAdkins.com. You can get a hold of us in any scenario or situation. If you would like some more information about any of the stuff that we have talked about or any other things that we can reach out to and help you with, we are completely open and willing to help as many people as possible reach their goals and dreams.

 

Important Links

 

About Annie Adkins

REU Annie Adkins | Owner Financing DealsJay and Annie met in high school choir in 1991; and haven’t been separated much since then! They have experienced many great times and many challenging times over the decades and have grown an amazing family with 4 children and 4 dogs. They attended college together for a time and Annie would go on the army band tour to see Jay sing and play in the Army National Guard Band when he was touring…they have always been there to support one another through good and bad times. They now enjoy doing workouts together and often compete with themselves to reach their next health and fitness goals, whether that be running ironman races for Jay or preparing to be beach body competition ready for Annie.

They began their entrepreneur career in their early 20’s with opening a multimedia entertainment business serving central Ohio, for corporate events and wedding venues all while Annie was full time focused on further education by obtaining her bachelors and masters in business, bachelors and masters in accounting and bachelors and masters in education. With their combined skills this business quickly expanded to one of the top businesses in their area with offering music, photography, videography and event planning…often doing 4-5 events at one time.

Shortly after systematizing and outsourcing most of their business tasks for that existing business, they decided to start growing additional businesses, this time in the real estate industry. Because the Adkins had a major challenge in 2005 of possibly being homeless themselves, due to having an ARM Loan and increasing payments,
As well as Jay having to go through months of rehabilitation from the deadly disease of alcoholism, they wanted to be sure other homeowners in a similar situation had someone to turn to.

With Jay being back on track for success Annie and Jay started doing mortgage loans and opened a mortgage office, followed by Jay obtaining his real estate license to expand their services further, once again offering multiple levels of services in the real estate industry and letting them gain knowledge of the market along the way. They also learned how to use other people’s money and partnerships to get back in the real estate investing game immediately. This naturally led them to begin their real estate investing career where they have done multiple types of real estate investments from starting with rentals early on, where they now have over 25 rental properties…..then expanding into doing short sales, wholesaling, fix and flips and vacation rentals in multiple states across the U.S. totalling well over 35 million in transactions of different varieties.

After multiple years of doing numerous types of deals they started a professional mentoring program that they could offer to interested people to start a real estate business that thrives and allows them to live the dream life they have always wanted to achieve. Jay and Annie’s coaching programs have been able to help people across the country set up real estate businesses that are successful and that they can be proud of.

Jay and Annie thoroughly enjoy their business as real estate investors and coaches with a growing multi-million dollar real estate portfolio. In addition Jay has been sober since 2005 and has spoken at multiple events and prisons about the effects of alcoholism and how to turn it around and become successful. In Jay and Annie’s opinions, their greatest accomplishment in business is helping others to achieve their goals!