Last week I tuned into the oldies station here in Phoenix. Huey Lewis and the News’ 1985 hit, The Power of Love, was playing. You may recall that this song was the title track from the movie Back to the Future. It’s memorable for me because the main character was named Marty McFly (I was often called McFly in high school after this movie became popular.) The other reason I enjoyed this flick was the time machine they used – a 1981 DeLorean. It was a very cool car made of stainless steel with winged doors.
After my stroll down memory road was complete I came to the stunning realization that a song I love and identify with was playing on an oldies station! I’m only 38. How could that be? Oldies stations play the Beatles, Elvis, and the Beach Boys. This got me wondering – when does a song officially become an oldie? My local station believes 25 years makes a song old enough to play on their airwaves, however I’m told there is no official industry standard.
Last month, I closed the sale of one of our properties using a seller financing exit strategy. The buyer put 15K down and our spread is 29K. The term of the loan is three years and the ROI to our group will be 30%. After I got the first interest payment of $877 in the mail a few days ago it occurred to me that this exit strategy is a real estate oldie but goodie. The last home I sold with seller financing was in 2001.
With loose lending criteria and stated income loans the norm who needed seller financing from 2001-2006? Rent-to-own, lease-option, lease-purchase and seller carry back transactions virtually disappeared like 80’s rock bands. If you could fog a mirror the bank would lend you money during this time.
With the collapse of the real estate market in 2007 millions of homeowners with stellar credit histories began walking away from their underwater mortgages. And while industry experts and moralists continue to cry foul, seasoned real estate entrepreneurs smell opportunity. These former homeowners, many with steady income and cash reserves, got burned by a bad real estate market and deserve another chance. The banks can’t lend them money to buy a house again because of draconian government and self-imposed regulations. But private real estate investors can and will.
Since I started offering a handful of our properties for sale with seller financing my phone started ringing off the hook. In less than two months I have built a list with more than 70 prospective buyers. Most of them don’t have two nickels to rub together but I’m working with several that have solid incomes and significant cash to put down.
So I’m thinking of a few requests my local oldies station can play. For the musical equivalent of the real estate market from 2001-2006 how about ‘Easy’ by the Commodores? From 2007 to the present I dedicate ‘These Boots are Made for Walkin’ by Nancy Sinatra. And the future…I can’t think of a more appropriate band or song then REO Speedwagon’s ‘Roll with the Changes’.