Third Party Owner Financing With Til Lowery
Through third-party owner financing, we can give people a new start and help them achieve their dream of homeownership, even when traditional options are not available. It's a complex and risky process, but the impact it can have on people's lives is truly priceless. In today's show, we have Til Lowery, creator of the TL Global System, who founded a proprietary real estate investment strategy that helps home buyers meet their dreams of homeownership while creating "mailbox money." Til shared with us how she got involved in the owner-financing business, which started with helping her brother through a tough divorce. She gave us a fascinating insight into what she calls "mailbox money," a unique way for people to purchase a home and start anew without traditional financing. During our discussion, Til explained the nitty-gritty details of the owner-financing process, which can be quite complex and risky. She also highlighted the potential benefits and drawbacks of this type of financing, and how it can have a significant impact on people's lives. With Til's expertise, we explored how the owner-financing system works and how it can be a game-changer for those who need a fresh start in their lives. Join us as we delve deeper into Til's story and the fascinating world of third-party owner financing.
Mentioned on this episode:
Jet Investor Lending - https://www.jetlending.com/
Watch the episode here
Listen to the podcast here
Third Party Owner Financing With Til Lowery
Camille Davis and I are excited to have Til Lowery with us. Welcome to the show.
Thank you for having me. It is an honor and privilege. Hello, Camille.
Til specializes in what is called mailbox money. We want to learn more about this fabulous mailbox money. Can you tell us a little bit about how you started? We will get into more about mailbox money. What does that mean? Tell us how you started this business.
In 2002, my brother, who was working for NASA, had four children. He got a divorce and left his house to his now ex-wife with four children. That seems to be the right thing to do. He moved into an apartment. After several years of having the kids every other week in a one-bedroom apartment, he came to me. He goes, “Til, when I got a divorce, my credit was destroyed. I'm tired of living in an apartment of several years with one bedroom with my four children. I have the down payment.”
He is an engineer. He has money. The unfortunate thing is when you get a divorce, you hurt each other. I still don't get it. You still want to be in love. At least take care of each other for the children. I said, “You want a house, and you have a down payment.” He has a monthly payment also. My husband said, “I will do it. I will buy a house for you using my credit, and you can pay me at the time.” This was many years ago.
At that time, you will write a check and mail it to the mortgage company. He wrote us a check with a deposit in the bank and mailed a check to the mortgage company. We bought him a house that he wanted. He got his children in the house, and he loves it. Several years later, he got refinanced. That is how we got started. My family are entrepreneurs, but none of them qualify for home loans. My sister and my cousin started asking, but we don't have unlimited credit and money. We said, “There may be a business to be had here.” This is how we got started in 2002.
Let me unpack that a little bit. Your brother was divorced, and he had a good job but destroyed credit. Other family members were entrepreneurs. They had income but maybe not the ability to get a traditional loan or mortgage. There is a business to be had there. A lot of people call it owner financing. Is there a formal term for it?
It is owner financing. We call it third-party owner financing because we are doing it for the third party and connecting them to the home buyers. Owner financing is the right term.
I have done this before. I have owner-financed property as an investor. I made the purchase, and I got the loan in my name. There was a person who was interested in buying the home, but they didn't have great credit. My husband and I asked them to put down 20%. They gave us 20%, and they started making monthly payments to us. We would then pay the mortgage company. Is the term for that a wrap-around?
Unless you have cash, it is a loan, but it is a wrap-around if you borrow money. Correct.
I want to make sure I'm getting the terminology right because some of our readers are new. They were like, “I didn't even know you could do that.” Other people are like, “There is a term for that, like third-party owner financing or a wrap-around mortgage.” That is what we are talking about here. We are going to dive a little bit deeper into that. Can you tell me how did you build a business? You went from one person to your family. As investors, sometimes we run out of money. How did you start to build a business around this?
We started with my husband and me. We had close friends. We said, “Would you like to help home buyers who can't qualify, get them a fresh start in their lives, and have something they can start owning their houses?” They say, “That sounds good. I can make some money while I'm helping home buyers to get into their homes and soon to become independent.” What I mean by independent is when they refi and the interest rate is lower. We want to help them in that way. I said, “Yes, it is great making money and helping.”
I get to my close friends, relatives, and whoever could qualify. I said, “Would you like to help me?” For those who have some cash, self-employed people, they were like, “I have some cash. I'm okay making 8%, 9%, to 10%. Can I do that too?” Eventually, you run out of friends and relatives because you have many buyers who need your help. What do you do?
When my baby turned eighteen and left for college, I was like, “I want to make a business out of this.” There are many people who need help. I want to be there for them because I went through it myself. For some period of time, I couldn't qualify for a loan, either. I was lucky to have a friend who helped me, but not everybody is lucky to get a friend or family to help them. I want to be there for these families.
I gather a group of investors. I was like, “Do you want to help me?” Eventually, we have a beautiful network of investors who has active income and making a lot of money. Now they do less work. They make a little bit less but passively. You know the beauty of passive money, mailbox money. You can be anywhere in this world and get your money. In the new world, you get your money digitally wired into your account or Zelled into your account. You can be on a private island or anywhere. The money keeps coming in. That is the beauty of life.
In this group, I know they are smart, talented, love real estate, and want to create more wealth for themselves and family. That is what wealth is about. It is not about working hard and making a lot of money. It is about knowing what you want and enjoying the moment in front of you while you are getting what you want. To me, that is wealth. It may be different for somebody, but the moment in front of you, if you enjoy that and know that you want to make passive income and it is coming in with you wherever you are, that is huge wealth. That is richness.
Cami, how did you meet Til?
It was a miracle. I don't know why I have never met you before because she is in Houston, Texas. She has gone to the same networking events I have gone to. It didn't happen until I became the InvestHER Meetup leader for Houston, Texas. She used to live in Florida. She had an InvestHER leader in Florida reach out to me. Til had done a conference for her. I spoke at her conference. She reached out to me and said, “Would you like Til to come to speak?” I'm like, “Would I ever like Til to come to speak?” We got on a phone call, and we talked to each other.
It is funny because when I first did my first owner finance wrap property, I thought the same thing. I'm like, “We need to make a business out of this.” It is time and effort to find all those people that can qualify for a loan and train. Til got this amazing program together. A long time ago, I thought that would be an amazing thing to do, but it takes a lot of time. I never did it.
The first property we ever bought, we bought with Jet Lending. We rehabbed it and put it on the market to sell. We had this owner-finance buyer come to us. He came and said, “I got $40,000 down.” This was a $150,000 property. He was like, “I will pay you 12% interest.” He was offering us to finance this property for him. I didn't know you could have a loan on the property. I had a loan on the property. I'm brand new at this. I passed up this opportunity because I didn't know you could wrap it. I didn't know I could create another note on top of the loan I already had.
I sold it. I made $17,000, but I would have made $37,000. Plus, I would still be making income up at this property. He is still there to this day, and that was several years ago. This is amazing. I love that your whole value in this is to help people. It started off with helping people because that is making a win-win. What I have learned is that is what makes us successful and good at this.
How was your experience, Camille? On the first day, were you nervous about the legality and how to deal with the homeowners?
It is a first-time rehab. I bought it as a HUD property. That was a huge process to go through to get even the HUD. To put the offering, you had to have an agent that was authorized as a HUD agent. That is a government foreclosure. Only homeowners come by them. They open up to investors. Even in Jet Lending, I remember thinking this process was difficult. I had to learn all of these things, and it was easy. It was carpet and paint.
When we listed it, we got nervous because it didn't sell right away. We refinanced.
Honestly, it wasn't even that long. We were just nervous. We already had a new loan on it. We had already paid off Jet Lending. It would have been easy to owner finance. I remember when I said yes to putting the offer in, my husband was scared that he didn't talk to me for a whole day. I said, “There is a deadline. We have to put this offer in. If we don't get it in tonight, we are not getting it.” It is not that he disagreed doing the offer. I think he was scared to death too.
We went and borrowed $10,000 from a friend. That was mental and emotional comfort because when we refinanced, we ended up going and taking a loan from his 401(k). This investor got all his money back plus 50% of his money because we were scared, and we needed that peace of mind. It is scary when you first do it for the first time.
Are you saying Jet was the investor?
No, Jet Lending was our lender, but we went and got a friend to help put up $10,000 to help us to put some rehab money. We had the money, but it was scary for my husband and me. I quit my job. We were on his income. I had to quit to stay home with my first baby. We have one income. We were like, “What if we can't make these payments or put all this money in upfront?”
It was carpet and paint, but still, it was about $10,000 by the time you fixed up the floors and put the paint in. Instead of being nervous if we could make these payments, we went and got a friend that put up the $10,000 so that we would feel comfortable. We could have found that money. We ended up finding the money after because now we are not scared anymore. It is a mindset.
You are telling my story because I started the same way with Jet Lending. They gave us the loan. It was a hard money loan that we got from them. We refinanced that loan. We then had that buyer come in and give us 20% down. That was the first house we ever purchased. We owner financed it to them. We still hold that note. That was in 2010.
Owner financing can be scary. I will say that these particular people that we put into the house filed for bankruptcy several years in. For two years, we didn't receive any payments at all. We were making payments to the mortgage company, but we were not receiving any payments at all. We had to get an attorney. We started the foreclosure process. They filed for bankruptcy to stop the foreclosure process. We modified their loan, went back in with the loan, increased the percentage and the interest rate, and added on all the fees, and they still owe us for another twenty years. We fixed it at an interest rate of 8.5%. It was 8% before. When interest rates were at 2%, and I was getting 8%, it was nice.
Everything is not rosy. There are some things that can happen. Whenever you are considering investing in real estate, you always have to have some contingency. Let's talk about what is the name of your company. Let's give everybody that. Next is how your company helps investors with this whole owner-financing deal.
The name of my company is TL Global. You can go to TLGlobalInc.com and learn all about the company and me. I feel for you, Camille, for the experience you went through. Even though you were afraid, you did it anyway. That is when you get out of your comfort zone. In the two deals each of you did, you made money, but you had to come out of your comfort zone. It is beautiful. What it is, you do it anyway. That is called courage. It is a lot of work and learning. When you are uncomfortable, that means it is time to learn. You have to learn it. There are a lot of uncertainties going on and unknowns.
Even though you’re afraid, do it anyway. That is when you get out of your comfort zone.
Being an investor for many years, I have seen the struggles that our investors go through. The new ones and the seasoned ones still go through a lot of problems. I came up with a system that I call TL Global System, where I take all the problems I experienced away from our investors. I show them why and how I do it, and I will do it for them.
If they decide to do it later, they can do it themselves. I will hold their hands to get them through the whole other problems and not the legality of it. That makes it easier for investors, especially the seasoned ones or the ones who appreciate our program a lot more because they have been through the ups and downs of it. We make it easy for investors to do it. The new ones say, “I will do it,” but they don't appreciate it as much. I recommend everybody to have a touch and taste of renting or fix and flip a bit of everything. You get to pick what you love and do more of it.
I'm ready to pick what I love. That is something easy. I love the idea of doing third-party owner financing the way you are doing it because you are doing all of the heavy lifting.
In your case, Renee, if you didn't collect two years of payment and you have to pay your mortgage, that is painful. You are more fortunate you have the money to pay for it. Not all investors have the money to pay for it. With us, we are like, “If they don't pay, we will step in and pay.” You don't have to worry about your paying your money. We step in and pay your mortgage for you. We saw the confidence that we could take care of the problems and that I will pay for your mortgage.
Are there three different bullets or buckets that you help with? You help with finding the loan first for the investor. You help with finding the buyer, and you help with problems.
I'm going to give you a few bullets.
What exactly are you helping with?
You know how hard it was to find your discount properly. When you finally find it, you have to do renovations to it because some of the ones you found were foreclosures. You have to do the renovation. To hire contract labor, there are a lot of unknowns there. Once you hire them, you pray they will do a good job and be on time as they promise. Once you have it renovated, you have to find a buyer to rent and get into the house. That is another unknown.
Once you find them, you get them in. You are praying that you found a great one so they don't destroy your house and make monthly payments. Once they are in there and decide not to pay, what do you do? You got to make your mortgage payment because you want to keep your credit. You have to pay an attorney to do a foreclosure or eviction. Once you evict, you get the house back. The whole process starts all over again. That is a lot of logistics and unknowns.
What we do is take all the unknowns out of the whole system because I have been through all the unknowns, and I hated them all. The worst for me was the renovation. You drive there every day to make sure they do their job. It is endless. When you have properties, people look at you as rich because you have many houses. When you do it 1, 2, or 10, it is okay. When you have more than ten, it is wild. Each toilet breaks down. You don't know when the AC will break down. If this is 10 or 100 times more, it becomes a burden, and it is no longer living, wealth, or richness. I decided, “Yes, I look rich, but I don't feel it.”
How many properties did you have, Til?
Over the trust and the investors, we have over 100. All of us together are hundreds. We decided, “There got to be a better way of making a living.” I created the system out of necessity because I was miserable. “I don't like renovation. I'm going to take it out. How do I make it without renovation? I don't like the unknown of looking for home buyers or renters. How do I figure out where I get that?” Having a house or investment property has holding costs. Eighty percent of people don't even know how expensive holding costs are.
The things I didn't like and struggled with, I created this system to remove all the things I didn't like. At present, I don't own any houses except for the house I live in, and for the rest, I don't own any houses. I get passive income and go wherever I want to go. The money keeps coming in. If the buyers don't pay, go through our system, and we will pay for your underlying mortgage.
Why are we solving the problems that we know? It is because I have been in it for so long that we know how to solve these problems. It takes away your pain and uncertainty. It gives you peace of mind. I want to do more of it for what I do for myself. I want to do more of it for my people and investors and help them have a better life. Life is already rough the way it is without all these real estate problems floating around. I want to take a little of what I can away from humankind so they can continue doing what they love to do, expand the impact, go out to impact people, and empower people like yourself and Camille. I will take all those problems.
When you have been in problems for so long, you get to know how to solve them. It takes away your pain and uncertainty. It gives you peace of mind.
I spent many years doing this, and every day is an improvement of the system. I take a small niche, owner finance specifically, for challenged credit home buyers. Real estate is such a wide range, this one niche. I have been using it for the past several years and improving it. Camille and Renee can do it, but why do you do it when you can do what you love? Let me do what I love. I created this to make this whole world better, a better place to do and live, and for you to do what you love. You add more value to society by doing what you love because if you love it, you do it better. I want to take that financial burden and the unknowns out of you so you can do what you love.
If you love real estate, do the raps, and owner finance, I'm happy to train you in that way if that is your passion. For Renee, I know you love empowering and connecting people. You want to make an impact on the world. You are good and amazing at it, and so is Camille. Go have it, enjoy it, and make changes in this world.
It took me several years to be full-time. I had 30 properties by the time I was four years in. It took me this long to be like, “I got every aspect of this.” People don't have that time and interest. I feel bad for the Spanish community in general because they will buy land and mobile homes because they are the only ones that will finance homes for people. That is what they think because there are not a lot of people who do what you do. They will pay 18% interest on these mobile homes.
There was one guy I talked to who has a home and paying $1,800 a month on a mobile home. He has land, but he can't keep up these payments. They set them up for failure. They are trying to live the American Dream. They are trying to have a house. You can come in and create this, “I can finance for you.” This is huge anywhere in the United States, but especially in Texas. It is amazing.
I know there are several groups of people whom this type of financing or program can help all buyers. Sometimes we have buckets of people who are immigrants, or you have people who are entrepreneurs. They don’t have the way the government works as far as taxes. If you are an entrepreneur, you want to try to write off everything you possibly can write off, which means you are showing little income. You want to show losses. This is for every person that is in business in America. You want to show losses to reduce your tax burden. That is legal.
At the same time, it is a double edge sword because I showed all these losses. I have no income, but now I want to purchase a property, and the bank is saying, “Show me the money. Give me your tax return. Where are your tax returns for the last several years? You are trying to buy a house. I see that you have had a loss for the last several years.” There is no income to be reflected.
There are all kinds of people who can be affected by this, no matter their socioeconomic class, race, religion, and ethnicity. This is something that affects everybody, no matter who you are because this program can fit people who have cash but don't necessarily have the qualifications to meet a standard or a traditional loan.
Do you know that approximately 8 of 10 people cannot qualify for a home loan in America? That is a lot floating out there. What do they do? They end up renting or living with their parents. Many out there needs our help. For those who need help, like self-employed people like us, it doesn't show that you make as much on the tax income. Does that mean you are poor? If you are smart, you write off everything, all your travels, business travels, and meals, but you can't qualify. Employee people can qualify, but the boss can’t.
How does that work? The people who come from outside the country and want to invest in our country don't have Social Security Numbers, but they want to be here. They can't qualify for a loan. My brother, in this case, who is divorced, has bad credit and is perfectly legit. He is an engineer. You know the details.
He is such a great person that cannot qualify for a home loan, always take care of his finances, and go through some unfortunate events. He can’t get a home loan. The people who have bankruptcy and want to start their lives, it is hard to restart their lives after they get bankruptcy. It takes years to get started. We want to be there for those people.
They are great people. It is that bad events happen. We want to help them to get back on their feet. If you define student loans, maybe there are some changes, but early in my time, if you defined student loans, you couldn't get a loan at all. For the students who started out, they need help. They don't need to be hurt even more.
It is hard to restart lives after getting bankruptcy. Sometimes it takes years to get started.
It is a great way for someone who wants to invest in real estate and make a good passive income as well because you are handling all the problems. They get a loan and make passive income. They get to make all that money.
Before we get out of here, there are a couple of different people who can connect with you. 1) Buyers. We have spent a lot of time talking about how we can help buyers. 2) Real estate agents. You have an interest in if they are agents who have buyers who meet this group and are looking to get those buyers qualified. Maybe this program could work for them. 3) Those real estate investors who are looking for passive income opportunities. You told me how you could help us. You are taking away all of the problems. How do we get involved with the program as an investor? What does that look like?
For home buyers, we always talk about it at length. As an investor, we make money while helping home buyers. To touch a little bit on realtors, because you are also a realtor, what do you do when you have buyers who cannot qualify for a home loan?
Can you represent them, or do you want to represent them? Smart realtors want to check if the home buyers are pre-approved for a loan first or have the cash to buy first, or it will be a huge waste of your time. You can show houses, but they can't buy.
What do you do with those buyers? Sometimes you send them credit repairs and give them some tips. Years later, you can convert your home buyers who cannot qualify pretty much dead leads into live leads by sending them to us, and we interview them to make sure they are a good fit. Once they are a good fit, we will send them back to you and say, “Help them find a house.” We will then get an investor to buy that house for you. The realtors represent the investor. You get a commission. That is huge.
All the realtors are like, “Yes, they are all of my buyers who don't qualify for a regular loan.”
You do nothing except have another two in your pocket. You are smart and aggressive and want to help home buyers. You can now double-help them. Get them home. For those who cannot qualify, what do you think of making an extra deal a month or week? How would that change you? We also train investors how to mailbox money.
I call it mailbox money because I'm old-fashioned. I have been around for a long time. Mailbox money feels like, “That is money coming in, and I don't have to do anything except I'm going to the bank.” Now, you don't even have to go to the bank. If they are interested, I'm happy to talk to them. Go to TLGlobalInc.com and register or call me at (713) 382-5000. We can have a chat and see if I can help. Even if you are going through some owner-finance deals and you are stuck, I'm happy to unstuck you.
I have been through one of your training. You are so organized. She got the most amazing team, cute women that look like you. They are powerful women. I loved your coach, the one that spoke. I don't remember his name. He was entertaining and good. He kept things moving along. He has been in real estate forever. It is a great team and business.
Tell me about the training. What was the training on?
She has training for buyers, realtors, and investors who want to come in and invest. She has courses. She feeds you. It is all free. She gave me this charger for free. She shares her wealth with everyone.
Do you like the chargers?
I got the chargers. Thank you.
Would you like for me to make more to give away?
Yes, I will hand them out to people. They work well. It is a charger you can carry around with your phone and keep charged up because Til travels all the time. She has this perfect lifestyle where she can go wherever she wants to. Passive money comes from mailbox money. Her program is organized. Ours was the realtor training. I went with Kyle, my husband, and it was impressive. It is amazing. Thank you.
Is it Zoom online or only in person in Houston?
Before, realtors were in-person, and buyers were alike. As realtors, we give service. We want to do the best job. We want to know hands-on so we can better help our home buyers. For buyers, it is such a big purchase ticket item. They get nervous. We usually want to meet in person to hold their hands to make sure we are for real.
Some people go through it 3 to 5 times and get rejected. They came to us, and they were like, “Is this a scam?” I said, “Let me show you.” Is it a scam? You have been turned down 3 to 5 times. We are here to help you. How could it be a scam? We will assure them that we have been around for a long time and we are here to stay. That makes them feel good. It makes them nervous. For most buyers, it is their first time. We want to make sure they feel good. We do most of our training in person and the same with investors. Where you are is 45 minutes from our office, but sometimes people fly from all over the country to go to our training.
You are expanding. She has training in Dallas, Houston, Austin, and San Antonio.
We want to make it convenient for all home buyers, investors, and realtors alike. People from Dallas flew to the airport. We met them at the airport. After we were done with the presentation, they flew back to Dallas. We make it more convenient for all home buyers and investors. We expanded for convenience for clients.
You do have investors from all over the world.
We have in California, Connecticut, and New York. They are everywhere. They can be anywhere. For home buyers, we are in the state of Texas only.
As we wrap up and put a bow on this, if people want to get more information, it is TLGlobalInc.com. If people go there, whether they are investors, buyers, or real estate agents, they can find some information on how to contact you there. Til, this has been a fantastic conversation. Camille, do you have any more questions for this powerhouse woman before we get out of here?
I feel privileged that we finally got you on the show. You are a busy woman.
It is a pleasure. For your audience, if you ever need me for any reason, I'm an email away. I'm not good with returning text messages, but my email is ICare@TilLowery.com. I usually respond within 24 hours. If I don't, that means I forgot about you. Don't get your feelings hurt. Resend the email. Don't say I'm neglecting you because I have so much going on in my life, but I promise I will get back within 24 hours. If you do it the second time, it is most likely before 24 hours.
Thanks again for your time. It has been a pleasure. We have learned so much. Thank you.
Thank you so much, Renee and Camille. Thank you for having me on the show.