The Secret to
Buying Real Estate
Without a Mortgage

In this episode, Jonathan and Krista explore the concept of owner financing, an alternative method to traditional mortgage lending that involves direct payments from the buyer to the seller. This discussion covers the fundamentals of owner financing, its benefits for both buyers and sellers, potential risks, and best practices for negotiating and managing these deals effectively.

Key Takeaways

What is Owner Financing?

  • The hosts begin by defining owner financing as a transaction where the property buyer pays the seller directly, bypassing conventional mortgage financing. This setup typically includes a fixed rate and a 5 to 10-year amortization schedule, culminating in a balloon payment.

Benefits of Owner Financing:

  • For buyers, owner financing offers quicker transaction processes, more flexible terms, lower initial down payments, and the possibility to avoid high bank interest rates. Sellers benefit by setting their own loan terms, receiving a steady income from the buyer, and potentially securing a higher sale price.

Challenges and Risks:

  • The discussion highlights the risks associated with owner financing, including the substantial balloon payment that buyers must face at the end of the term. Sellers must navigate the complexities of drafting legal agreements and ensuring the buyer’s financial reliability.

Finding and Negotiating Owner Financing Deals:

  • Jonathan and Krista advise prospective buyers to engage with real estate professionals to locate properties available for owner financing and to ensure all legalities are correctly handled. They discuss how sellers who own their properties outright can facilitate these deals more easily, though agreements can still be structured if the seller has an existing mortgage.

Key Considerations for Buyers and Sellers:

  • Both parties need to agree on clear terms, such as payment schedules, consequences of late payments, and understanding tax implications. They emphasize the importance of a thorough vetting process for sellers to minimize financial risks.

Owner Financing as a Landlord:

  • For landlords considering owner financing for their rental properties, maintaining a financial buffer for unexpected payment issues and conducting strict tenant screenings are crucial for ensuring steady cash flow and investment stability.


The episode wraps up by affirming that while owner financing offers significant advantages and flexibility, it demands meticulous planning, legal advice, and financial caution. The hosts encourage both potential buyers and sellers to consider this approach carefully and to seek professional guidance.


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