How to Buy Investment Property without Ever Going to a Bank with Brad Smotherman

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Brad Smotherman – Real Estate Investor from BradSmotherman.com and host of the Investor Creator podcast, talks to Neil Henderson, the hosts of The Road to Family Freedom podcast. Brad is an investor and mentor who owns and manages a 7-figure per year flipping business. His focus is on buying single-family flips creatively, both subject-to and with owner financing…and selling retail or with owner financing (creating wrap notes).

With 11 years in the real estate business, Brad has invested in over 15 states, has houses from Michigan to Georgia, and has completed over 550 transactions to date. Brad is the host of the top 100 business podcast Investor Creator, where he teaches new and seasoned real estate investors how to take their house flipping business to multiple 6 or 7 figure income without sacrificing freedom.

Post-Interview Analysis 

  • Key Lessons Learned: It’s possible to create equity using terms, just like there is using rehab to force equity in a BRRRR. Example: Acquire a property “subject to” the existing $175,000 mortgage. Selling that property using owner finance for $220,000. He’s just created $45,000 in equity using the terms. 
  • How did they acquire their knowledge or what knowledge did they need to acquire? The mindset is key. You are going to hear a lot of “No’s” in this business. Developing a mindset that this is largely a numbers game and that eventually, you will hear a “Yes” is key.
  • How much money did it take to get started? Zero! With a caveat. The most effective way to find these deals is with direct mail marketing, and that takes money. His first big marketing spend was $15,000.
  • How much time does it take now? It’s very difficult to put a number on the amount of time this strategy takes, but I would say to do it effectively you would need at least 20 hours per week to devote to it. Less if you were able to build a team, but that is true for nearly every strategy.
  • Could they do this strategy from anywhere in the world? Yes, IF you had a team on the ground in the market you were targeting. You are going to almost certainly have to have someone meet face-to-face with these sellers.

Episode Highlights: 

  • Schedule a video chat with Neil Henderson at roadtofamilyfreedom.com/selfstoragecall
  • The long struggle to acquire his first real estate deal
  • The structure of buying a property “subject to” the existing mortgage and then selling it owner finance.
  • How he communicates with the seller’s bank in acquiring a property “subject to” the existing mortgage.
  • Tips for building rapport with a distressed seller in a potential “subject to” deal
  • And much more…

Books and Resources Mentioned

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About the author, Neil

Neil Henderson is the co-host of The Road to Family Freedom, a self-storage investor, and avowed proponent of short-term rental house hacking. He founded The Road to Family Freedom to guide busy parents to financial freedom through passive real estate investing.

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