THE SATURDAY EDITION · ISSUE 4
In this issue: a free AI skill that turns a stale listing into a seller-financed offer the seller can say yes to. Plus the investor who built 6,500 units with no outside equity, how one family-office team uses AI on acquisitions, and why it matters that 4 in 10 homeowners now own outright.
How many doors do you own or control today?
AI APPLIED
The Seller Is the Bank
A free skill that builds seller-financed offers, and shows the seller's side of the math next to yours.
Seller financing usually starts with the seller: "owner will carry" in the listing. But a buyer can put it on the table too, when they know enough about the seller to make the case: an owner with little or no mortgage, a large taxable gain and a listing that has gone stale. That case has to be in writing, with the seller's numbers next to yours, or it rarely makes it past the listing agent.
This week's free AI skill does that for you. The Seller Financing Offer Builder (a packaged set of instructions your AI assistant follows step by step) takes a listing and what you know about the seller. It scores how likely the seller is to finance, builds three offers, and lays your cash flow next to the seller's cash at closing, interest income and taxes against a realistic cash sale. It checks every note against the IRS minimum rate and tests whether you could refinance the balloon when it comes due. Then it puts the offer in writing: a one-page term sheet and a short, plain letter for the agent to present to the seller.
What it found on a test deal
A 12-unit building, listed at $1,450,000 after a $145,000 cut and 210 days on market. The seller has owned it since 1998 and owes $180,000. Your bank quote is 7.50% with 25% down, and you need a debt service coverage ratio (DSCR: net operating income divided by the loan payments) of 1.25. Test deal; the property and seller are invented.
The bank loan fails. Even at the likely $1,325,000 cash price, DSCR is 1.14.
Seller financing works. At $1,400,000, with $350,000 down and a $1,050,000 note at 5.50% for 30 years (7-year balloon), DSCR is 1.33 and cash flow is $23,499 a year, against $11,659 with the bank.
The seller gets more. $75,000 above the likely cash price, plus $383,357 of interest over seven years.
Big discount on the seller's tax bill. About $229,000 of gain is reported in year one instead of $812,000 in a cash sale. Illustration only; the seller's CPA runs the real numbers.
It flags the fine print. Stretch the balloon to 10 years and the IRS minimum rate rises to 5.52%, so a 5.50% note falls short. It also warns that the balloon wouldn't refinance at today's rates without rent growth, and suggests what to ask the seller for.
On a smaller test deal, a duplex, the margin was thinner. A bank loan just worked at the cash price, and seller financing won the seller at full asking with $9,250 less cash down.
