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“A bank is a place that will lend you money if you can prove that you don’t need it.” ~ Bob Hope

The past couple of years have witnessed stringency in the U.S. lending space, and getting necessary financing for real estate investment has become increasing challenging. If you are a sophisticated investor with an existing real estate portfolio, you won’t have to fret about financing, but the equation is quite different for novice investors.
A new investor might undergo several detours between the initial offer and closing of the deal, with financing being one of the primary reasons. If you are facing similar financial uncertainties, seller financing could be an excellent option for you. Seller financing in real estate involves a seller who finances the purchase for the homebuyer, while acting as a traditional lender. As good as it may sound, only a small fraction of deals close with seller financing, as stated by a report.
At Sense Financial, we work with real estate investors, including both sophisticated as well as novice professionals. Helping real estate investors purchase property through Solo 401k has allowed us to learn some of their trade secrets. In fact, a majority of investors gladly share their knowledge and experience in seller financing. One of the key challenges facing novice investors is to find suitable deals for seller financing, and we are going to discuss some tips to overcome this roadblock.

How to Find Seller Financing Deals in Your Market?


The key to seller financing is finding sellers that are motivated to sell their house, and as it happens, sellers who are delinquent on their mortgage payments or facing a potential foreclosure make the best candidate for seller financing.
How to find pre-foreclosures 

  • Search for ‘legal paper for your county’ on Google
  • Visit County Recorder’s office online/offline to find about auctions and distressed properties
  • Check legal notice section of your newspaper for sheriff’s/trustee sale
  • Use pre-foreclosure/auction section on


Another motivated class of sellers includes families facing bankruptcies, and you are quite likely to find bargain deals. These sellers are likely to offer modest lending terms. You can find about them in the county’s legal paper.

Eviction Records

Have you heard about the “Iceberg Model/Theory?” As per the model, only 10% of the iceberg floats above the water, with 90% of its mass underneath, and in a manner, real estate is quite similar to an iceberg. Novice real estate investors often jump into rental space because of what they have heard, only to realize later that owning rental property is nothing short of a challenge.
In your search for seller financing candidates, check the eviction records of your county and focus on properties with multiple evictions at a higher frequency. Very few rental property owners treat real estate as a business and many of them lack the necessary skills and tools for effective management. They are quite likely to accept your seller financing offer, as they will still receive their monthly cash flow minus all the hassle.

Vacant Homes

If you haven’t tried ‘Driving for dollars,’ you are certainly missing a huge opportunity. You may have observed some vacant homes in your target neighborhood, but you’re a little hesitant about this strategy. An effective driving for dollar strategy could help you build a strong pipeline and open the door to multiple types of deals.
What type of properties you will find? 

  • Bank Owned/HUD Properties
  • Probate Properties
  • Out of town homeowners

Signs that you should look for 

  • Overgrown lawn
  • No code enforcement
  • Boarded windows
  • Piled up mailbox/newspapers
  • No maintenance

What you should do 

  • Search local Central Appraisal Directory to find property status
  • Track down property owners through public records
  • Mail an offer to their address or get in touch with responsible attorney/realtor

Purchase Property through Solo 401k Retirement Plan

Once you have done all the legwork, it is time to boost your real estate investment by purchasing it through your Solo 401k retirement plan.

Why adding real estate to your retirement portfolio makes sense?

  • Get access to your retirement funds and invest in high-quality assets.
  • Your rental income grows tax-free until distribution.
  • Solo 401k plan will pay for maintenance, saving you from any immediate financial burden.
  • Your retirement account can receive higher returns on investment, with chances to grow at a higher pace.

What is the difference between purchasing property through Solo 401k retirement plan and regular real estate transaction?

The best part about adding real estate to your Solo 401k plan is that the process is exactly the same, with the only difference being the title holder of the property. Your Solo 401k retirement plan will hold the title of the property, although you will sign on behalf of the Solo 401k plan.
Important facts to understand 

  • Use only non-recourse financing for funding
  • Every expense goes from the Solo 401k plan only
  • Rental income comes directly into the plan
  • Never deal with disqualified persons