Buy Your Home Without Conventional Financing

By | April 12, 2015

TAT-podcast-FB-300-ABIf you have been ready to buy a personal residence but feel you are being held back because of bad credit or self employment this this story may help!

After the big crash I followed my dreams of becoming a real estate investor. I was buying properties using OPM (other peoples money) and flipping them for a quick profit. Although I was on the right track and enjoying what I was doing I really wanted to move my family out of the apartment we lived in and into a house.
There was a few small problems with this dream.
First I had several foreclosures and a bankruptcy from my first failed business venture back in the early 2000’s
Second I was self employed and banks were not friendly to self employed people after the crash!

I needed to get creative!

To find a new personal residence I utilized the same strategies I used to buy investment properties and applied them towards buying a house for my family.

Here is where I started:
I jumped on Craigslist looking for single family homes in the city I wanted to live in.
After finding several candidates I marked every one of them down listing their price, address, contact info and just watched them. I was waiting for the motivation to appear!

One by one houses I watched sold and fell off the list but one of them remained unsold with the price being dropped every few weeks.
This is the sign of a motivated seller!

I kept an eye on this house (like it was a hot stock tip) waiting to see how low it would drop. This place went from $180,000 to $165,000. I continued to watch and wait for this trend to continue when a few days later it was off the market!
I drove past the property the following weekend and sure enough there were cars in the driveway of this once vacant house!


It was back to the drawing board for me.

Trying not to be discouraged by this situation I once again focused on “for sale by owner” properties listed by motivated sellers.

Once again my list of prospects grew and although some sellers showed great signs of motivation I had to remain disciplined on what I would make an offer on. After all this was going to be my personal home and not an investment property!

After a few months of new research something interesting happened. The house I was originally watching popped back on the market. Within the ad there were some key phrases that showed this sellers motivation: available immediately
Motivated Seller
Will rent or sell

Oooo whammy!

Keywords like that let us know this seller is done with this property and they need the weight lifted off their shoulders immediately! I didn’t hesitate this time! I called the seller to make some small talk.
He told me that after the property didn’t sell he decided to rent it out for cash flow but unfortunately for him the tenants stopped paying rent after the second month and had done some damage to the house.
I explained to him that I would be interested in buying the property if he would hold the financing for the first few years.
He stated that he is willing to entertain offers but We should meet at the property before we get to heavy with negotiations.


The next day we met at the house and it was clear why it would not sell. This house was very clean but screamed 1980’s. The rehab work that was done consisted of very cheap vinyl tiles, fresh paint and carpet cleaning. The seller was burned out and could not stand the thought of sinking another dime into the house.
During small talk I found out that he mortgaged his personal home to pay cash for this property. He owned the property free and clear!
His problem was that all the expenses he incurred from cleaning, painting, rehabbing, taxes, marketing, a short term bad tenant and over a year with no interest pushed him over the edge.

This seller needed a house gone and I needed someone that would carry the financing long enough for me to clean up my credit from my previous business failure.

Here was my proposal to him:

•I would buy the property for $165,000

•I would give him $5,000 down that would be credited towards the purchase price.

•I would pay $1,200 per month and $150.00 of that $1,200 would be credited towards the purchase price every month

•The financing term would be for 24 months and I had the right to extent the term for an additional 12 months If I felt necessary.

•I had legal right to sell the property during my 36 month term

• This means If I could not cash him out within 36 months he would have the right to take the property back!

He agreed to my verbal proposal and we shook on it
The next step was to draw up an agreement. He had his attorney do the paperwork and my attorney reviewed and approved it.


While this was going on I contacted a title company and order a lien search of the property. Although the seller told me he owned the property free and clear it’s always a good idea to confirm the facts with a title company. This will cost around $150.00 and is worth every cent as it’ll give you peace of mind or if it’s not free and clear it confirms the owner is a liar and you should run for the hills!

The short version is everything checked out and I moved into the property. 28 months after moving into the property I obtained conventional financing and cashed out the owner! As of writing this I still live in this home but I am ready to step it up and buy a bigger property for my family.

So how will I do this?

By utilizing the same strategies I used to buy this property!

This post sparked an idea for a podcast episode. If you constructed a creative deal to buy a personal home without utilizing conventional financing then I want to hear about it. If I like your story I want to have you on the show to share how you did it!
If you are interested email me your story at and you could be invited to share on the podcast! How cool would it be to have your experience inspire others to start taking action today!

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