Real Estate Rookie – Episode Summary

Episode: How to Structure Seller Financing (Get a 5% Interest Rate!) (Rookie Reply)
Date: September 19, 2025
Hosts: Ashley Kehr and Tony J. Robinson
Podcast: Real Estate Rookie by BiggerPockets

Overview

In this episode, Ashley and Tony answer three “rookie” real estate dilemmas submitted by listeners, focusing on:

1. How to access equity in a recently renovated home before typical lender “seasoning periods.”
2. Pivoting property rental strategy when short-term rental returns underperform.
3. How to structure a seller financing deal, aiming for a 5% interest rate as a first-time investor.

The hosts offer practical solutions, draw on personal experiences, and break down industry terminology for listeners new to real estate investing.

Key Discussion Points & Insights

1. Accessing Equity in a Recently Renovated Home

(00:27–09:11)

The Listener’s Dilemma

Jonathan asks:

• He bought a house with a hard money loan, fixed it up, and wants to pull out equity.
• He’s told by his mortgage broker that only the original purchase price matters for valuation since he hasn't owned it for one year.
• Wants to know: Is this a lender issue or a legal rule? Are there options to unlock more of his new equity sooner?

Insights & Advice

• Seasoning Periods:

  • Banks often require a seasoning period (typically 6-12 months) before they’ll recognize new appraised value for a refinance.
    • Tony: “If you attempt to refinance or tap into that new value in less than six months, then yes. Oftentimes they’ll only appraise it at the purchase price or sometimes purchase price plus cost.” (01:41)

• Portfolio Loans / Local Banks:

  • Ashley suggests smaller local banks or credit unions may offer more flexibility and could refinance based on appraised value after as little as 30 days.
    • Ashley: “I actually refinanced after 30 days...This was a very small loan, local bank…a portfolio loan option where it’s actually an in-house loan.” (02:19)
  • Tony explains portfolio loans:

    "When you see banks that have this portfolio loan option, they typically have more flexibility because they're not worried about making it fit the box that it needs to fit to be able to be sold to Fannie or Freddie..." (04:19)

• HELOC & Second Loans:

  • Ashley clarifies: You can’t get a new line of credit for the full 85% of appraised value. If you already have a mortgage, it’s 85% minus what’s owed.
    • Ashley: “That 85% would only be another $5,000...You’re not getting 85,000 on top of the actual mortgage you have on the property.” (06:15)

• Exploring Lenders:

  • Tony advises calling multiple banks/credit unions for different seasoning rules, especially if there’s significant forced appreciation.
    • Tony: "I’m just going to find, you know, 100 local banks and credit unions... Chances are if you call around to enough banks, maybe instead of you waiting 12 months, maybe it’s six..." (07:33)

• Private Money as an Option:

  • For short-term access, consider private lending if your plan is temporary.
    • Tony: “Maybe getting a private money note from someone makes more sense…You’re able to tap into that equity today.” (08:44)

Notable Quote

“Probably is a case of maybe go talk to some more lenders and see if there’s someone that’s maybe more flexible.”
— Tony J. Robinson (07:58)

2. When Your Short-Term Rental Flops: Should You Go Midterm or Long Term?

(12:05–20:23)

The Listener’s Dilemma

Erica from Denver:

• Her furnished 4-bed/2-bath STR (short-term rental) hasn’t been profitable.
• Should she go midterm (e.g., travel nurses), long-term, or something else?
• What can she realistically expect from midterm, and what platforms are best?

Insights & Advice

• Try Multiple Strategies in Parallel:

  • Ashley recommends listing on both midterm (e.g., Furnished Finder) and long-term platforms simultaneously while keeping STR listings open for any nearby bookings.
    • Ashley: “I would list keep my short-term rental listing open…market it on a place like Furnish Finder as a midterm rental…also list it as a long-term rental for a pretty ridiculously high rent.” (13:26)
  • Check local laws for Denver first due to strict regulations.

• Diagnose the Real Problem:

  • Tony urges to check if poor STR performance is due to:
    • Internal issues (owner performance, bad reviews, pricing, property design)
    • External/marketwide trends (occupancy dips, regulatory changes)
    • Did the owner underwrite with real data or just “hopeful” projections?
    • Tony: “Why isn’t this property performing well? Is it internally driven or externally driven?” (15:02)

• Leverage Furnished Rental Value:

  • Consider furnished room rentals or listing the whole house furnished at a slight premium.
    • Tony: “You could probably market it simultaneously, but is doing furnished room rentals...Maybe charge a slight premium.” (18:18)
    • Ashley: "There are a lot of scenarios where someone could be looking for something that’s already furnished..." (19:34)

• Operational Differences:

  • Each approach (STR, MTR, LTR) has different management requirements and legalities.
    • Ashley: “When you’re going to your, if you do decide to pivot to the other strategies…those operations are significantly different for each of those different strategies.” (17:58)

Notable Quote

“It’s convenience that people will pay for, right? That’s the biggest thing. So you’ve already got that asset of the furniture, the amenities, the design. See if you can leverage that first.”
— Tony J. Robinson (20:23)

3. Deal Deep Dive: How to Structure a Seller Financing Offer (and Get a 5% Rate!)

(25:18–35:55)

The Listener’s Dilemma

Kyle in Dallas:

• Found a house on the market for 120 days, owned free and clear, seller open to seller financing.
• Can put down 10%, needs interest-only at ~5% to break even.
• Concerned about agent commissions (both a buying and selling agent at 3% each).
• Never done a seller financing deal before—how should he structure his offer and what to negotiate?

Insights & Advice

• Seller Financing Basics:

  • Tony:

    “In a seller financing scenario, the seller is acting as the bank...We create a promissory note...and we can set up that promise to repay her in any way that we want.” (26:00)

• Structuring the Offer

  • Know your numbers (max payment/interest rate/terms that work for you)
    • “The more insight you can get from the seller...what their motivation is...is also very helpful.” (Ashley, 28:36)
  • Start by identifying what matters most to the seller: purchase price, monthly payment, balloon payment, down payment, etc.

• Caution About Interest-Only

  • Ashley warns that with 5–7 years of interest-only payments, you build no equity, heightening refinance/sale risk if values drop or plateau.
    • “My first thing would (be) to challenge you to not make it an interest-only loan because that's a long period of time to not be paying down any equity and I think it makes it a lot more risky...” (30:15)
  • Suggests amortizing over 15, 30, or even 40 years for principal paydown, which lowers refinance risk at balloon.

• Leveraging Flexibility

  • Seller financing is fully negotiable — payment schedule, interest, amortization, balloon, even down payment timing (“...no rules here like there is in banking. You could amortize it over 40 years if you wanted...” Ashley, 30:50)
  • Example: Ashley did a deal with zero down at closing, but paid a chunk annually.

• Handling Agent Commissions

  • Options:
    • Ask both agents to slightly reduce commission (e.g., 2.5% each)
    • Negotiate seller covers all commissions (traditional norm) even in creative deals
    • Or, agree to cover agent fees in exchange for lower down payment
    • Tony: “My first ask is asking the agents if they would each accept maybe a slightly reduced commission to try and get the deal done…” (32:14)
  • Commissions are negotiable: deals Ashley has seen lately are 5%, not 6% (Ashley, 33:47)

• Negotiation Is the Name of the Game

  • Tony: “Pick something and start with it and make sure you're on the path of what works for you. And then based on their first response, as long as it's not like never contact me again...get some insight as to why (they rejected it).” (33:55)
  • Don’t give up at the first "no" — adjust price, terms, interest, or payment schedule until it fits both parties’ goals.

Notable Quotes

“There’s just unlimited opportunity and options here.”
— Ashley Kehr (28:08)

“That’s the point of seller financing as an advantage and opportunity—is that it’s negotiable. So pick something and start with it and make sure you’re on the path of what works for you.”
— Tony J. Robinson (33:55)

Memorable Moments (with Timestamps)

• Portfolio Loan Flexibility: “They typically have more flexibility because they're not worried about making it fit the box...They get to make the guidelines themselves.” (Tony, 04:22)
• Interest-Only Caution: “That's a long period of time to not be paying down any equity and I think it makes it a lot more risky of a deal.” (Ashley, 30:15)
• Multi-Strategy Listing: “I would market it on a place like Furnish Finder and I would put it up as a midterm rental...and also list it as a long-term rental for a pretty ridiculously high rent...” (Ashley, 13:30)

Timestamps for Key Segments

• Seasoning Periods, Refinancing and Equity Access: 00:27–09:11
• Pivoting Short-Term Rental Strategies: 12:05–20:23
• Structuring Seller Financing Offers: 25:18–35:55

Language & Tone

The hosts speak in a hands-on, supportive, and slightly playful style, remaining practical throughout:

• “Let’s just talk about quickly what seller financing is for folks...”
• “I love this question because I love talking about making offers and seller financing...”
• “There’s just unlimited opportunity and options here...”

Summary

This episode offers grounded advice for beginner real estate investors facing real-world, first-time challenges. Ashley and Tony break down complex financial concepts into approachable steps and emphasize persistent, flexible negotiation—whether refinancing a reno, salvaging a rental strategy, or crafting a creative seller finance offer. The actionable guidance, personal anecdotes, and focus on negotiation and local lender relationships make this a valuable listen for rookies mapping their next move.