Every time I’m at an investor meetup in Texas, I hear it. “I’m just sitting on the sideline until rates come down.” I’ve been hearing it for two years now. And every time I hear it, I want to ask the same follow-up question.
Waiting where, exactly?
I’ve closed deals where the seller gave me 0% interest, took $0 down, and handed me a 30-year note. Their motivation wasn’t desperation. I showed up with a structure that solved their actual problem, and nobody else did. The rate environment never came up.
Here’s a specific deal. I bought a $100,000 house on seller financing. The seller had owned it for decades. Their cost basis was almost nothing. They had three offers on the table. Mine wasn’t the highest number. Mine was the call they returned.
What I understood that the other buyers didn’t: their problem wasn’t price. Their problem was taxes. A straight cash sale would have triggered capital gains on nearly the full $100,000 in the year of the sale. But if I spread my payments over 30 years, they could spread that taxable income too. That’s a standard IRS installment sale structure. It’s been sitting in the tax code the whole time.
The 0% interest was their idea, not mine. They weren’t trying to earn yield on the note. They wanted the property off their books, cash flowing in monthly, and their tax liability stretched into the future. I put $0 down. We set my payment at $1,000 per month, pure principal, 30-year amortization. They said yes. My tenant paid the $1,000.
Four years later, my tenant had paid down about $48,000 in principal on a house I’d never written a personal check to acquire. My property was worth around $180,000 by then. I was sitting on roughly $128,000 in value, and my out-of-pocket was ZERO.
My seller wasn’t desperate. My seller was calculating. I was the only person in the room who ran the right calculation.
The Part I See People Get Wrong
When I write a seller-financed note on an owner-occupied property, Dodd-Frank applies. My note cannot negatively amortize. That means my monthly principal and interest payment has to be at least equal to the monthly interest accruing on the note balance. If I let my payment fall below that floor, I’m in violation.
I multiply the note balance by the annual rate and divide by 12. On a $180,000 note at 7%, my floor is $1,050 per month. Standard 30-year amortization clears that automatically. The deal I described had 0% interest, so my floor was zero. That’s one reason why I pushed for 0%: it simplifies the compliance math considerably.
Math. I know. Not the most fun section. But I’ve watched deals blow up over this, and it’s not worth it.
I also always set my first payment to the 1st of the month following a full month after closing. It keeps my day-count math clean and avoids partial-month accrual problems right out of the gate.
Who I Think Wins From Here
My honest read is that high conventional rates actually improve my negotiating position as a buyer who understands seller financing. When a conventional buyer is carrying 7.5% debt and struggling to qualify, and I come in with an installment structure that solves a seller’s capital gains problem at 0%, I’m not competing against easy money. I’m the only offer that makes practical sense for that seller.
The investors sitting on the sideline waiting for rates to normalize are going to watch this window close. My experience is that the sellers with the biggest capital gains exposures are often sitting on the best properties — bought decades ago, fully depreciated, managed by someone who’s tired. Those sellers exist in every Texas market right now.
Do you know what to say when you’re sitting across from one of them?
Where I Teach This
I don’t care about theory. I want to put real deal structures in front of you that you can copy Monday morning. That’s what my team built the Black Sheep Convention to do.
We’re at the Hilton San Antonio Hill Country on September 25-26, 2026. Twelve operators. Ten classes. Ten hours of Texas CE. We don’t bring keynote speakers selling you a $20,000 mentorship from the stage. No pitch-fest. No five-figure back-of-the-room close. We bring practitioners who are working real deals and teaching what actually produces income.
In-person all-access is $399. Live online is $99.
The sellers with capital gains problems don’t have a calendar alert set for when you feel ready.
Black Sheep Convention tickets are on sale now.
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