Forums **Ask A Question** Time on market. Cash sale versus terms.

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  • #17746
    JT Taylor
    Post count: 39

    Hey all, have been investing here in Texas over the past year and have done picked up around 10 properties, selling them all for cash. Recently, however, I have become very interested in terms properties. It seems like here in Texas, you can sell a property on financing, but the deed will go into the buyer’s name and you would hold the note like a bank. I really like the sound of the Arizona land contract that Jack and Jill have talked about on the podcast. My understanding is that you have the contract and don’t deed the property until the full amount of the terms have been paid.

    My only concern is just that because of the successful mail campaigns of Land Academy members, the market in Arizona might be over-saturated as far as cheap rural land is concerned. I might be entirely off base with this, but my question was has anyone over in Arizona sold properties on very friendly terms (I.e. $99 down, $99 a month), and if so, have you found it sells quicker than all cash?

    Additionally, has anyone sold properties on terms in any other states that you can do a land contract similar to Arizona?

    I appreciate any response or any opinions on this!

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  • Anwar Montgomery
    Post count: 97

    I’ve sold on terms in Arizona and multiple other states that allows Contract for Deed/Land Installment. They seem to sell quicker than cash but not always. However, the quality of buyers at the friendly price point you mentioned will attract more hand holding types, tire kickers, and flaky buyers. Also, the default rate is high so you’re income can fluctuate. I just had two people default this month. I think that price point is nice to get your feet wet but once you’re past that, the velocity of money in those small terms deals (or should I say lack of velocity) starts to really hold you back from just cranking out more deals. I really understand what Jack is saying now when he says they don’t really do many terms deals anymore. It is nice to get those monthly payments while sitting back and doing nothing, but I am really starting to prefer cash.

    It may seem like the AZ market is over-saturated but I know an brand new investor who just sent out his first mailer last month and working on a very nice deal in AZ, so there’s still opportunity there.

    Luke Smith
    Post count: 1300

    AZ is not saturated. There are a lot of buyers and sellers there at the right price.

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