Picture this deal.
Houston, 2024. A buy-and-hold investor finds a motivated seller on a dated ranch home in Pasadena. The seller is tired, owes almost nothing, and open to carrying the note. No bank needed. This is exactly the kind of deal where creative finance prints money.
They shake hands on $185,000. Seller carries $150,000 at 7%, 30-year amortization. The buyer’s PI payment: $998 a month. Taxes and insurance run another $400. Totally workable numbers. The buyer runs the math, pencils out a small cash flow, and says yes.
Then somebody fills out the Seller Financing Addendum.
They put $1,398 in the Note Payment box.
Not $998. $1,398. Principal, interest, plus escrow — combined — in the box that’s supposed to define what the note payment is.
Here’s the problem: the Note Payment box doesn’t mean “what you pay per month.” It defines the promissory note — the legal instrument, the document that says what the buyer owes and what happens when they miss it. Escrow isn’t part of the note. Escrow is collected separately, on top, and it shifts every year when tax rates change. The moment you combine them, you’ve legally committed the buyer to a payment $400 higher than anything they agreed to.
The buyer shows up to closing. The note says $1,398. The buyer says they agreed to $998. Both are correct. One is their memory. One is the signed contract. Guess which one the title company cares about.
The deal almost died in the closing room.
What saved it was a sharp title agent who had seen this exact mistake before and slowed everyone down long enough to get an amended addendum signed. That costs time, costs trust, and sometimes — when the seller is already skittish — costs the deal entirely.
This seller almost walked. From her seat, the buyer was changing the deal at the last possible second. She wasn’t wrong to be suspicious. The paperwork said one thing. Now they were asking her to sign something different. The explanation was logical. The trust damage was real.
What to steal from this.
The Note Payment box on the Texas Seller Financing Addendum belongs to the note only — principal and interest, period. Escrow is a separate disclosure, handled outside the promissory note so it can flex without triggering a modification every time the county reassesses.
Run your addendum by somebody who has closed more than a dozen of these before you sign anything. Better yet, know the form cold enough to catch it yourself in real time.
This isn’t obscure knowledge. It’s the difference between a deal and a disaster. And it’s precisely the kind of thing that never comes up in a standard CE class where an instructor walks you through the form without once telling you where the bodies are buried.
Why this story belongs at the black sheep real estate convention.
At the Black Sheep Convention, Alan Seschger doesn’t teach Sub-2 theory from a slide deck. He teaches the part of Sub-2 that burned somebody — specifically the moment when the paperwork diverges from the conversation, and what you do when you’re standing in a closing room at 4 PM trying to figure out whose fault it is.
That’s the format. That’s what makes it different. There’s no version of this story where a keynote speaker hands you a framework about mindset and you leave Monday knowing how to handle a blown addendum. You learn this from somebody who has been in that room.
This September in Houston, Alan runs two sessions: one on Sub-2, one on novations and JV agreements. Same format both times — real deals, real paperwork, real screw-ups that got sorted or didn’t. You get the story and you get the clause that stops you from living it yourself.
The newbie series runs parallel: marketing, financing, and vetting deals — taught the same way. Not a lecture. Not a pitch. Not a back-of-the-room upsell into a $15,000 mastermind. Just operators teaching other operators what took years to learn the expensive way.
September 26–27. Houston. StepStone agents get in for $249 full event, or you can pick one day. Nobody who has shown up has ever said they wished they’d stayed home. The food’s good too.
But the addendum box thing? Don’t wait. Pull your last seller finance contract right now and check whether the Note Payment includes escrow. If it does, go have a very uncomfortable conversation with your title company about what that actually means.
The convention will teach you fifty more situations exactly like this one. But this one you can fix today.
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