Passive Real Estate Investing · Real Estate Investing with Marco Santarelli, Investor and Entrepreneur.

TBT: Ask Marco - Buying an Owner Financed Property

·11 min

This Throwback Thursday episode features host Marco Santorelli answering a listener's question about purchasing a property with seller financing. Marco revisits a popular past discussion, emphasizing its continued relevance for investors. The core inquiry comes from a listener named Alan regarding a full-price MLS listing with owner financing. Alan asks if paying full price is wise when a property meets the 1% rule for cash flow. Marco challenges the common adage that you always make your money on the buy, arguing long-term equity growth often creates greater wealth. He explains the decision hinges on whether the seller financing is a first or second mortgage and its loan-to-value ratio. Marco states that with 100% financing and positive cash flow, your return on zero down is technically infinite. He cautions that such a leveraged purchase means starting with no equity, which builds over a holding period of 5-10 years. A surprising insight is that seller financing often stems from a seller's desire to defer capital gains taxes, creating a potential win-win. Marco reveals he has personally paid *more* than the asking price for a property to secure favorable seller financing terms. He clarifies that a bank does not need to be informed of an owner-financed deal if it's not recorded in public records or on your credit report. The episode frames the entire decision as a math problem, contingent on proper due diligence and realistic budgeting for vacancies and maintenance. The tone is educational and conversational, with Marco offering direct, principle-based advice. The style is a solo monologue responding to a specific listener query, free of guest interviews or debate. This episode is ideal for a new investor analyzing their first owner-financed deal or anyone seeking clarity on leverage and deal structuring. Listeners looking for high-energy storytelling or advanced creative finance strategies might find it too foundational.

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