How to Buy a House Without a Bank Using Seller Financing with Mel Dorman
What if going to the bank wasn’t the only path to owning your home? We’ve been told to budget harder, cut back, and wait for someone with a fancy title to approve us. Meanwhile, millions of homes are owned free and clear by people who would happily let you pay them directly. Let’s talk about it.
Melissa Dorman went from dumpster diving in their twenties to building a multimillion-dollar real estate portfolio in their thirties. By combining traditional bank loans with creative seller financing, they acquired 34 rental units in just five years. A former social worker turned financial activist, Mel shows that wealth doesn’t have to flow through Wall Street to grow.
As the founder of the Seller Financing Academy and author of Bank on Your Neighbor, Mel teaches everyday people how to use conventional tools and community-based financing strategies to buy property, build equity, and keep wealth circulating locally instead of allowing it to be siphoned upward to billionaires. Their TEDx Talk on creative finance became an Editor’s Pick and has reached hundreds of thousands of viewers hungry for an alternative to the corporate grind.
How does seller financing work? Seller financing is when you pay the owner of a home directly instead of going through a bank like Wells Fargo or Chase. Mel explains that 4 out of 10 homes in America are owned free and clear, which means those owners can take monthly payments from a buyer, just like selling a used car to a neighbor on an installment plan. It helps older owners retire, can save them a lot on taxes, and turns landlords into lenders.
How can you buy a house if the bank says no? You go straight to the seller. Mel shares that about 50% of people who qualified for a bank loan in 2019 no longer qualify, often because banks removed the loan products most people used. Renters with years of on time payments, people who just changed careers, and others the bank algorithm rejects can still buy by building a direct relationship with a seller.
How do you buy property with little money down? Negotiate around the seller’s real risk, not the bank’s 20% rule. Mel’s first seller wanted $75,000 down and she had about $8,000. She asked what it would cost him to foreclose on her ($15,000) and made that the down payment. She negotiated two months of delayed payments, leased up the vacant units, and was only $500 out of pocket on a triplex that cash flowed day one.
What paperwork do you need for a seller financed deal? It’s simpler than most people think. Mel says it’s about a five page document made up of two pieces: a promissory note, which works like an IOU laying out the payment, interest rate, and term, and a deed of trust, which attaches the loan to the property. Unlike a bank loan, you can sometimes move that good debt to another property you own.
Why doesn’t budgeting build wealth for women? Because budgeting alone is about cutting back, not growing. Mel explains that women are taught to budget and play it small, while men are taught to scale, build businesses, and invest. When all your focus is on cutting things away, you never think about using leverage to scale, and that gap is a big part of why more men hold wealth.
How do you get the confidence to start investing in real estate? Start with who you’re becoming before you take action. Mel’s advice is to build your self-concept first (a leader, a breadwinner, someone responsible, strong, and resilient) instead of jumping into hustle mode from a place of scarcity. That belief is what keeps you going when things get scary, so you step up instead of giving up.
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Barbara Provost, EdD and Maggie Nielsen, MBA are the co-founders of Purse Strings, a national platform helping women make confident financial decisions by connecting them with vetted financial professionals who truly understand women’s lives and money needs. Purse Strings connects women across the U.S. with vetted financial professionals who specialize in supporting women through divorce, money transitions, and financial independence.
Full Episode Transcript
(This transcript was generated using AI, so please excuse any misspellings or errors)
PS: Mel Dorman (MP3)
[00:00:00] Little life update. Maggie has now moved, yes, I’m talking about myself in third person from Kansas City to Chicago. Very excited to be back in the city. So if you’re here, hit me up. Let’s hang out. But I met my landlord. His name is Luis. He’s so sweet. He’s outside my window doing some work on the unit next door, and one of the biggest things was, like, I really wanted to find a place where the landlord was not part of some big conglomerate, you know?
And I [00:00:30] met him. He’s from Colombia. He’s owned here since ’85. He owns another building in the other part of town and does, like, all the work, electrical, plumbing, all the things. So when I pay my rent, I feel so fulfilled that it’s going to this man who I see doing hard work, who’s owned this business, who’s fixing up a place for his wife who has arthritis so she can be on the first floor.
And it’s such a different value-based spend for my rent. I mean, I love my place. That’s all those good things, but knowing that my money is going to [00:01:00] someone in the community, someone who lives here. He’s trying to live in the building. He’ll put in the good work. It’s not just one of these big organizations from, like, somebody who doesn’t even live in the state, and I think that’s so important to make sure your money is staying in that community.
And as Mel uses as an example, you know, it keeps nurturing the soil, right? It keeps coming back to that place. And so I’m excited to have Mel on today as she kind of uses this different kind of tool to help you grow your kind of [00:01:30] real estate portfolio. It’s really about decentralized wealth, empowering ordinary people, even though we’re extraordinary, and prove that rules with money can be rewritten.
So I’m very excited to share this episode with all of you on how you can buy houses from your neighbors and it’s called seller financing. And so Let’s dive in
[00:02:00]
Maggie: All right, grab your coffee, grab your water, whatever it is. This episode’s [00:02:30] gonna be amazing. I am so excited to have Mel Dorman on the podcast today. I’ve been all through your Instagram following all your stuff. I am so excited to share this opportunity, as I think it relates to so many women. So before we dive into everything, let’s share a little bit more about who you are, what you do, and then, like, bring us back to your dumpster diving days, ’cause who doesn’t love to start there?
Mel: I love it. Yeah. So yeah, Mel Dorman. I’m an accidental influencer. I basically used to be a [00:03:00] social worker for a long time, and my family had a financial crisis. My dad got Alzheimer’s when I was 23 years old, and he was 67. And, you know, we’re blue collar, middle class, living paycheck to paycheck, and so it really stopped me in my tracks.
Mel: Before that, I thought money was dumb. I thought it was for greedy people, evil people, that you had to do bad things to get money, and I had no interest in becoming wealthy. But I realized that money meant you, you have options. Option to take care of people that you love, options to quit a job you don’t like.
Mel: It means power. And so I [00:03:30] changed my perspective on money, and I stumbled into seller financing, which ultimately was my means to become financially free by buying properties directly from my neighbors, which is what we’ll probably talk about today.
Maggie: Yeah, definitely. And I think your story about, like, you know, a social worker, I think, like, you get paid nothing, and you’re doing God’s work, and everyone needs you, and it’s never paid enough, and somehow they want a master’s degree and to pay you 30K. And, like, you’re supposed to still be mentally sane.
Maggie: Like, none of it adds up, which is so stressful ’cause it’s like same with teachers [00:04:00] and stuff, like, we need you, and we won’t pay you. Maybe ’cause the job is, you know, done by women. We’ll get to that a different day. But, you know, having this wake-up call, caring for aging parents… I mean, we talk about this all the time.
Maggie: The baby boomers are aging. 10,000 people are turning 65 every day. Like, this whole population is aging out, and it’s gonna be expensive to care for them, and a lot of that is gonna fall onto this lower generation. A lot of the women are gonna have to take care of this. So it’s, like, not uncommon this experience that you went [00:04:30] through.
Maggie: Tell us more about you and your dumpster diving days and kind of what happened. I know it was a bit about your dad. You know, this momentum that really changed everything. Is it… Was it, you know, your dad got sick and you left your job? Give us a little bit more broken down there.
Mel: Yeah, so, I was really community-minded when I graduated from college, and actually I started a community house with about eight other people, and this was 2009. You know, we graduated into the worst economy an economy that was totally tanked by the banks handing out loans to people who really weren’t capable of it, and a lot [00:05:00] of abusive lending practices just broke our nation.
Mel: And unemployment was extremely high, and so the way that we got by was we dumpster dived at night. I’d jump into a Trader Joe’s dumpster and we just ate like kings and queens. I like to joke that when I told my parents about it, I was like, “Look, Mom, I’m turning debris into charcut-debris.”
Maggie: Love it
Mel: it
Mel: brought us together, you know?
Mel: And I think that’s one, one advantage and one silver lining to really hard economic times, is we really start to lean on one another as a community, and we can’t really have the [00:05:30] luxury of isolation that we see so prevalent in the United States. And so yeah I just really banded together with everybody.
Mel: I ended up living in India helping women out of sex trafficking for about a year, and when I came back my dad was sick, and that just broke everything for me. And I was a social worker. I was making, like you said, 30, $40,000 a year barely managing, helping, you know, kids off the street really and into housing for the first time foster youth who didn’t have a place to go and help them into permanent supportive housing.
Mel: I was working in jails and psych wards and [00:06:00] doing the Lord’s work, like you said.
Maggie: We need someone doing it, right? We need to pay them though. You gotta stay alive as well. Can’t pour from an empty cup
Mel: Yeah. And so, you know, when this happened to my family, it really turned my world upside down, and it made me start questioning everything. You know, the, the 40-hour workweek, the 40 years of clocking in, the 401where you give your money to the worst companies of the United States who lay you off and, you know, adopt AI and quit your– you know, get rid of your job, and all these things that we’re funding and we’re not even [00:06:30] thinking about.
Mel: And I started looking into real estate as a way to build wealth, and it didn’t take long. I mean, I bought my first property off-market, sending what I like to call love letters, just sending letters to my neighbors saying, “Hey, I’m a social worker. I’m looking for my first property. I’d love to get into it.
Mel: And so that really got me started, but then I stumbled into seller financing. And for those that don’t know what seller financing is, it’s quite literally when you pay your neighbor down the street directly for their house versus paying Wells Fargo or Chase or any of that.
Mel: And right now, [00:07:00] you know, four out of 10 homes in America are owned free and clear, which means that person can take payments from you directly. Just like if you were gonna buy a used car from your neighbor, right? You wouldn’t run to the bank and go get a check. You’d just make an installment payment.
Mel: “Hey, I’ll pay you $1,000 a month for the next 10 months,” or something like that. And so it’s the same idea. It’s just person-to-person trade, and the beautiful thing is it helps an elderly person retire save a ton of money on taxes if they’ve owned it for a long time. It turns landlords into lenders, which is a much easier role, and it allows younger folks [00:07:30] like myself to get into real estate and building wealth and appreciation and equity, which over time is how you retire and downsize and just enjoy your life and not have to work all the time.
Maggie: There’s so much I wanna pull apart here is ’cause there’s like so many questions I have and, you know, starting first of like totally aligned with this 401, we talk about value-based investing, and that’s more than just, you know, shopping at Amazon or something like that, but also, where those investments are held.
Maggie: And so I feel like this brings us back to one when you submitted for [00:08:00] this podcast, you suggested the title of how the patriarchy keeps women small. Can we dive into that first before we get into how to make a ton of money is ’cause I think that’s such an important part to highlight, and it’s this mindset shift of like money is bad, money is evil, all these things to like really flipping it to like when women have power and money is power,
Maggie: There’s no stopping.
Maggie: us.
Mel: Yeah.
Maggie: There’s no. stopping.
Mel: absolutely. You know, one of my big breakthroughs is I came from lower middle class family, and learning about sociology and [00:08:30] psychology and being a therapist, I started to deconstruct the ways that I’ve been socially conditioned to think, both as a woman, I was born in, like, a really Christian family, so being gay was not okay, so I had to, like, un-condition myself from those, destructive and toxic beliefs.
Mel: And I also started doing it around money. I realized, “Wow, I have these subconscious thoughts that money’s gonna make me evil, money’s gonna make me a bad person. I had to do something wrong to do that.” And all of those thoughts were actually oppression disguised as [00:09:00] morality, and those thoughts produced my results, which was poverty.
Mel: And once I made that connection that the oppressive force was actually living rent-free in my head, I was enforcing the rules of oppression upon my own self by adopting those narratives, then I was set free. I was like, “Oh my gosh, no. i- I want to be wealthy. If I was wealthy and a bunch of women were wealthy, the world would be a different place.
Mel: I have to start with me.” And so it was that real enlightenment in my own thought patterns that, that freed me into financial freedom [00:09:30] first.
Maggie: Which is a huge thing of why people tell you don’t talk about money. And that’s why we’re like, “This is women and money, the sh*t we don’t talk about,” because they don’t want you to talk about it ’cause then you might all grow wealth and have freedom. Oh my God.
Mel: Yes. And for women, we’re told to budget. We’re told to play it small. Don’t be too ambitious. Don’t speak up in meetings. Don’t be demanding because that means you’re a, you know, we’ll say a B. I won’t cuss on your show, but like, you know, there’s these rules about femininity, and actually what those rules are is about how to keep women small.
Mel: And [00:10:00] until we question those rules and start looking at it through the lens of empowerment, we’ll recognize that if you focus on budgeting, you don’t build wealth. If you focus on always cutting things away, you don’t think about using leverage to scale. And men are taught to scale and to build businesses and to invest, and even though they’re really bad at it compared to women, they actually do it, and that’s why more men have wealth than women.
Maggie: I mean, that’s exactly where I take Jeff Bezos and MacKenzie Scott. They’re coming from the same fund, and look e- drastically how different that money is being [00:10:30] used. Do you know what I mean?
Maggie: Like, same trickle-down and look at where we’re landing. So love letters to your neighbor. At what point were you like, “I’m gonna try and buy my neighbor’s house”?
Maggie: Like, you sound crazy. Like, how do we get there? ‘Cause it also sounds, like, a little scammy if I’m… You know? It’s
Maggie: always like we’ve also gotta protect ourselves, so, like, give us the
Maggie: deets
Mel: Yeah. I mean, I think that’s another social conditioning, right? We have been socially conditioned to rely on banks and institutions for our lending,
Maggie: Cause they’re [00:11:00] not scammy.
Mel: Yeah, ’cause they’re not– ’cause they got a logo and a commercial, and they spent lots of money treating you like a customer, and so you think that’s your role.
Mel: But in that process, we have lost our power because before banks got involved in the 1920s and ’30s and started the 30-year fixed rate mortgage, we just bought and sold directly. This was the original way to sell property. It is also still happening. 87,000 people did it last year. Over $30 billion was traded this way, you know?
Mel: So it’s not new, and it’s [00:11:30] also not something that’s not happening right now, right? Like, it is prevalent. But American consumers don’t know about it, right? They have been blocked out of this, and so they think either, you know, to buy a property, you either have to have a lot of money, all cash, or you have to be bank qualified.
Mel: And if the bank says no, then you’re locked out. You don’t have any other options. The problem is the bank has locked out, you know, 50% of people who were qualified in 2019 are no longer qualified for a bank loan, not just because of pricing, not just because of rates, but because they have removed the [00:12:00] products that most people would qualify under.
Mel: They have made it harder to get a loan. And people don’t realize that. And so there’s all these really great borrowers out there, right? Renters who have paid on time for years and years, people who are immigrants who may not have the correct status to get a loan, folks who just transitioned careers and they’re killing it, but they just started their new career and the bank locks them out, right?
Mel: There’s so many things the, the algorithm of the bank says you can’t buy with. And so you take all those really qualified people, and you introduce them directly to a seller, and now they build a [00:12:30] relationship, so they’re more committed, right? It’s not a big bank or institution. You’re not getting foreclosed on by Chase.
Mel: You’re getting foreclosed on by your neighbor, so you better, you know, show up with integrity and take care of them. But it’s a person-to-person relationship, and so you get to decide the down payment. You get to decide the interest rate. You get to decide the length of the term of the loan.
Mel: Everything is just a conversation around both people’s needs versus when you’re doing a bank loan or all cash, there’s just one thing you negotiate: price. And you beat each other up on both ends, and you try to [00:13:00] find what’s wrong with the property and try to negotiate here, and they try to tell you it’s worth more, and it’s just, it’s All about price, and there’s a winner and there’s a luder- loser, but they both kind of feel like they lost, right?
Mel: But when you have four things to negotiate on, interest rate, down payment, the length of the loan, whether it’s amortized or whether it’s interest only, well, I can give the seller their price. I’ll give them their price all day long. You take the price. Give me an interest rate that cash flows day one with almost no money out of pocket.
Mel: That’s what I want. You know, and so it can be a win-win and both parties leave happy.
Maggie: All of [00:13:30] this is making sense. And yeah, when you negotiate on a house, I mean, you just kind of do what you’re told from the banks, and you just are lucky if you get it. You know? It’s like, and I thank you for the 7% interest rate. You know what I mean? Like, because now I’m qualified and I can get my family a home.
Maggie: So tell me how, like, you create cash flow and do this with your neighbors. Like, you know, can we put some fake numbers around it? You know, I have a neighbor, she’s 70, she’s single, she’s a widow. They’ve owned the house. They’ve lived there forever. Like, how can we, you know, me and Neighbor Betty work together?[00:14:00]
Mel: Yeah. I’ll give you an example. My first property that I ever bought, ’cause this is what my TEDx talk is about, and a lot of people love it. But basically, I met a retired bankruptcy attorney, and he was an intelligent guy, and, you know, we hit it off. And a few months into the friendship, he asked me to tell him what his triplex was worth.
Mel: So, I showed up to the property, and I told him it was worth about 725, 730, something like that, and he agreed. And then he said he wanted to seller finance it to somebody, which is actually what happens a lot of times. You know, people [00:14:30] know about this when they’re older because they survived the ’70s and ’80s when interest rates were 18, 19%, and everybody started doing seller financing.
Mel: It was in vogue. Everybody understood it.
Maggie: It’s like we don’t do that much
Maggie: anymore. I’ve never heard people talk about it.
Mel: Yeah
Mel: But older folks are familiar. It’s often… I mean, that’s how Kelly, my seller bought his first home, so he was familiar with the process, and he understood the advantage of collecting all that interest. So, we basically negotiated person to person.
Mel: He wanted $75,000 down. I didn’t have that. I just quit my job as a [00:15:00] social worker. I had, like, $8,000 in my checking account. So I said, “Well, what would it cost for you to foreclose on me?” And he said, “$15,000.” And I said, “Well, let’s make that the down payment. If I don’t pay you, you can use my own money to foreclose on me.”
Mel: And so you see how I, it wasn’t about a 20% down rule that the bank had. It was about his actual risk. And then two of the units were vacant, so I said, “Well, could you give me two months of delayed payment so I can lease those up and recoup my money?” So, I ended up going to closing. I borrowed [00:15:30] $10,000 from some friends, which a bank would never let you do.
Mel: I had to come up with 7,000 of my own. I came to closing with 5,000 of the remainder down payment and 2,000 for the closing cost. Note that’s not 12,000. That’s what a bank charges. 2,000 for the closing cost. And then I basically leased up those units, and I got 6,500 of my $7,000 back. So, by the time I owed my first payment, I had spent $500 on a triplex that cash flowed day one.
Mel: And after a year, I paid off my friends who lent me that 10,000, [00:16:00] so then it cash flowed about $1,100 a month. And remember, I was making $3,000 a month as a social worker, so that was a third of the way to my financial freedom on my first seller financed deal. So, and that deal ended up having babies. There’s all sorts of cool things you can do when the seller writes the paperwork with you.
Mel: You can move it around to other properties. So, imagine your mortgage becoming mobile, and it’s funding the next deal and the next deal. That’s basically what I did, and I bought 20 more units out of that $500. I was able to just move the debt around and pull out [00:16:30] some cash during the 2020 era when there’s a lot of really low interest rates and I put a down payment on a 20 unit seller financed.
Mel: And so that one $500 today pays me $3,800 a month, which is my entire social work salary.
Maggie: Wow. Yeah,
Maggie: this is amazing. And so now I know you teach people how to do this as well, because it’s com- it seems, you know, complex. It’s just new and different. My question is, like, what kind of… You know, at Pull Strings we’re always about making ourselves protected. What kind of, like, contracts, payments, attorneys do you have kind of in [00:17:00] this process as well as we can’t just sign it on the back of a napkin and pray for the best, because it is large sums of money
Mel: Totally. Yeah, so it’s actually quite simple. It’s about a five-page document. It’s two documents. One is a promissory note, so think like an IOU, like, “I, borrower, will pay you this much money each month,” which is this much interest rate for this many years, just very simple. And the other one is called a deed of trust, and what that does is think of it like peanut butter and jelly.
Mel: You put the sandwich together, now the loan is attached to the [00:17:30] property. And so most people think that the property and the loan are like one and the same. When you sell the property, the loan goes away. But when it’s seller-financed, You can ask that seller, “Hey, I’d like to sell the property, but can I keep the good debt?
Mel: I’ve negotiated really good debt at like, say, 4% or 5%. I’d like to move that to another property I own that’s cash flowing, that has plenty of equity.” You’re gonna be very secure there, and what happens is you have a free and clear property. And with a free and clear property, you can sell it, you can refinance it, and either way, that money that comes back to you is gonna be [00:18:00] tax-free as long as there’s no gain.
Mel: And so, ’cause borrowed money has no tax. So that’s how you can take one property and make it have babies, is you can move the debt around in your portfolio like a checkers board, which you can’t do that with a bank.
Maggie: How did you learn all this? They don’t teach us in social worker school
Mel: No, yeah. I went to a weekend boot camp about 10 years ago. They gave me a folder afterwards. They said, “Good luck,” and I… Basically, I started a small group of people who had graduated from that boot camp, and we started working on our deals and meeting [00:18:30] every week and learning from each other and supporting each other, and we all became financially free over the course of the next, like, four or five years.
Mel: And so when I decided to build my program, I decided it would not be a weekend guru kind of experience. It would actually be a, a, a year of support, really helping people through this process.
Maggie: yeah. that’s amazing. And I know, like, what do you tell these women who are just like, ” Yeah, this just seems either too complex for me. I’m afraid of buying my own property or buying the building.” You know, it’s you gotta go two feet first, right? And it does seem kind of [00:19:00] scary,
Mel: Yeah, you know, I think one step that a lot of people miss when they’re trying to do something different is they jump right into action. You know, like, “I’m gonna go do this, and I’m gonna talk to this person. I’m gonna learn the rules. I’m gonna watch these courses,” or whatever. But you really can’t succeed until you mentally develop the self-concept of who you’re becoming.
Mel: So if you start in that hustle energy, you’re unlikely addressing the core fears that you’re inadequate, that you’re not made for this, that you don’t know enough. You’re coming from a place of scarcity, and your results will [00:19:30] be from your thoughts, and you will not be successful. You’ll give up easy.
Mel: You’ll tell yourself, “Oh yeah, of course I can’t talk to a seller. This’ll never work. This is a scam. I’m a scam,” whatever. But if you start with your self-concept, if you start with, “I’m a person who, who’s gonna have millions of dollars. I’m a person who can handle managing a building and tenants.
Mel: I’m a leader. I’m a person who’s a breadwinner. I’m a person who takes care of others. I’m responsible. I’m strong. I’m resilient.” If you start from a place of abundance and then you grow that self-concept, then your actions will follow [00:20:00] through into different results. You’ll have the results of stepping up when things get scary, of resourcing yourself, of seeing yourself as capable rather than sort of shirking back and being afraid of the challenge.
Mel: So yeah that’s my recommendation.
Maggie: Wow, I couldn’t have found a better answer for that right there. Um, out of 10, ’cause so many people are just, “Educate yourself and feel equipped,” you know? And it’s so much bigger than that. And that’s where when you fail and you’re like, “See? I knew I couldn’t do it,” it’s like, no, that w- we’re nipping that in the bud right now
Mel: Yeah. Yep, yeah. When you have [00:20:30] that belief that’s where all that fuel comes from is a really strong belief in the possibility of who you’re becoming.
Maggie: And so doing and buying buildings or houses this way, it keeps the money in the community, it keeps the money out of the banks. I mean, it just seems like it’s doing good at every time the money touches something, which is I mean, is exactly what we want. It kind of takes down that patriarchy, stops giving the money to the man, uses good debt, which we like to highlight because not all debt is bad debt.
Maggie: There is good [00:21:00] debt, you know, and that’s how you do grow wealth. And I I see this so much on threads. People are like, “I’m debt-free.” I was like, “I don’t know if that’s a win, though.” Credit card debt-free is great, but, like, you know, it depends what kind of debt, and we gotta be s- specific there. So I love how when you touch every single point, it’s back to that value-based spending.
Maggie: You know, it’s in my community. It’s through local people. It’s having that money move how I want it to
Mel: Mm-hmm. Yeah.
Mel: I think, you know, so often in a modern world, it’s very complex, right? You go to a job, you clock in, there’s all these moving parts. They tell you [00:21:30] to opt into a 401, like this is your new retirement. There’s no such thing as pensions anymore, and it’s really easy to sort of not take responsibility for your own financial future and to just fall in the system, follow the crowd, what everybody’s doing.
Mel: But that system is specifically set up to benefit a very small minority of humans a handful of billionaires and a very small 1%. And so once you realize that you realize you don’t want to be normal, right? Normal Is going to keep you in the herd, [00:22:00] right, and headed towards a bad path. But when you can break away from that and say, “You know what?
Mel: Where do I want my money to flow? Where do I want to invest? Well, you know what? I wanna invest in Kelly and Susan because they’re dear people in my life now who are older and they live cl- locally to me, and I wanna make sure that they’re set for the rest of their retirement. And I’m responsible enough to find good tenants, to maintain a building, to make sure that, you know, it’s cash flowing and it’s in a good space.
Mel: I’m responsible enough to support Kelly and Susan’s retirement if they’re willing to give me an opportunity,” right? And that’s the [00:22:30] beautiful exchange, and I think you might probably see this too, but our nation’s very fractured right now. The social fabric… Yeah
Mel: and especially after COVID, we’re so isolated and we’re so afraid of each other, right?
Mel: And news and media is only, like, driving that and trying to make it worse, and Facebook and all these sort of things are really pitting two parties against each other, this nonsense, right? But the reality is our communities need each other, and until we’re physically invested in each other’s lives it’s just a person, right?
Mel: But when you’re like, “Oh, I care about [00:23:00] where my payment’s going. It’s not going to Chase. It’s going to Chad,” right? It’s going to a person down the street. Suddenly, that money becomes real, and it stays local, and it actually like if you think about a garden, like it keeps your garden full of nutrients, right?
Mel: But when we keep stripping the land and we keep sending all of those nutrients to banks and billionaires, and then we go, “Why is it so hard to survive?” Well, you’re sending about a quarter of your paycheck to somewhere else, and everybody’s doing it alongside with you. You know, of course the land is bare, right?
Mel: Like [00:23:30] we’re sending all our nutrients out of our city. Why don’t we keep that local in the most obvious way, which is paying another person for property?
Maggie: I just moved to a new place, and literally my landlord Luis is out here. He’s fixing up the unit next door. I’m just like, “Hey, like, here’s your money.” Like, I feel so excited giving it to him because, I know him, he’s there, I see him working on the places. He’ll fix anything that’s broken.
Maggie: And there is something about, when people own in the neighborhood, they vote there, they care about the community, the homeless population, the food pantries, those [00:24:00] different things, the schools, you know? And so when you have these big banks buying up places, which they are everywhere, and then you have these tenants who are just renting, it’s not that boots on the ground.
Maggie: Those nutrients are not staying there, and so it’s like, everything just, folds into it again and again, you know, how important that is.
Mel: One thing I’ll add, you know, as we’re thinking about our nation from, like, a p- political standpoint, how divided We are. You know, one of the things I’m starting to teach my students is what I call the Bank It Forward model. So you go out into the [00:24:30] Midwest, particularly where price points are 100 or 300,000.
Mel: The middle of America where, you know, financially speaking our nation has abandoned, right? There’s just not as many jobs. The cities are where all of the, the money’s at, and we have this divide between sort of the rural red states and the blue cities, right? And it, and largely because the M- the Midwest feels abandoned by the political left.
Mel: They feel like their priorities their needs financially have not been prioritized in the party, and so then they got attracted to, [00:25:00] well, fascism is the nicest way I can put that. And so I really wanna heal that. I wanna train people who are either living in the Midwest already or who are in progressive cities who have my same sort of mindset about caring for one another, and I wanna teach them how to negotiate directly with a seller in the Midwest, give them their payday, allow them to play the bank, right?
Mel: And stabilize the Midwest while also then doing what’s called a lease option to purchase. So, sort of a rent to buy, right? So they’re just playing the middleman between the seller getting their [00:25:30] nice exit and getting paid the most on their property and helping a new homeowner get into housing.
Mel: And so, like, from my very privileged place in a city and where, you know, a $100,000 house seems like nothing, I can take that little bit of money that I do have, and a lot of folks who are probably listening do have in the bigger cities, and I can help somebody into homeownership and I get paid three times, okay?
Mel: This is what’s so beautiful about this. Most investors, they’re– You know, if you wholesale a property, which is like, you know, selling it to another investor, you get paid once. If you’re a realtor, you get paid once [00:26:00] on that commission. If you’re a house flipper, you get paid once on that property, right? But if you do it this way, you get paid when the buyer gives you their deposit for the home, right?
Mel: And that’s non-refundable. You get paid then. You get paid on the difference between the, what the buyer pays you and what you pay the seller, so there’s your cash flow. And you get paid when you sell it, and that’s the difference between what you bought it from the seller and what your end buyer ends up paying you.
Mel: And between those three paydays, you know, often it’s around 40, $50,000 in three years. And that’s the type of healing where we’re [00:26:30] physically investing in an area that most people are like, “I don’t like those people. I don’t wanna help them.” Well, guess what? If you start to help them, they stabilize, and they go, “Wait, those progressive people in those cities really care about us, and I kinda wanna change my political beliefs around queer people, You know what I mean?
Mel: Like, you build those relationships, and it’s really where your money flows, and that changes, I think, hearts and minds.
Maggie: We got a lot of Midwest listeners on this pod,
Maggie: so strap in. They’ll be listening. Yeah, that’s definitely where we’re based, so I’m excited to get that out to the communities as [00:27:00] there are a lot of people who still need homes and wanna get in there. And just, I mean, ’cause my next thing was kind of like, prices are high.
Maggie: Like, everyone knows it in every sense, in an interest rate, in the gas prices, in the eggs, whatever it may be, and everything’s a terrible pri- time to buy, you know? So, like, this is a, where I would say you disagree here, you know? Like, you can still support your neighbors because this isn’t touching that patriarchal system
Mel: Yes. Yeah it’s definitely the feminist way to invest because you’re cutting out big [00:27:30] institutions, the power structures that sort of extract from our communities, and you’re replacing them with person-to-person relationships. And I think on the grander scheme, like, interest rates aren’t a problem when you’re setting the interest rate.
Mel: Down payment sizes aren’t an option when you’re the one setting the down payment amount, Right, Like, prices do matter, right. Value’s true, and you do have to honor that to an extent. But everything else can be designed around that, and that’s the creativity and the imagination that I really wanna spread, that people realize that they have that power to design their own terms in a way [00:28:00] that suits the buyer and the seller.
Mel: Nobody has to lose.
Maggie: Right, right. I love that. So tell me how people can like tap into your community or get your support so, you know, they can become wealthy and support their community and keep people in housing and all of these different things.
Mel: Yeah. I mean, for those that really wanna take this to the next level and take it from this is a really cool idea to I actually wanna build passive income this way we have the Seller Finance Academy, and it’s about 300 students in the last year. We’ve had just [00:28:30] an explosion of growth in our community, and it’s like-minded folks, you know, community builders, folks who have been locked out of bank financing, who are taking charge of their life and building those strategic partnerships in either their own community or in the Midwest and creating opportunities for homeownership through that lease option strategy.
Mel: And so, yeah, go to sellerfinanceacademy.com. You can check us out, and also my book, “Bank On Your Neighbor,” right here too, is a good resource for free if you look it up. Yeah, you can go on Apple or [00:29:00] Spotify or whatever. I’ve actually recorded it myself and made it widely available just to, just to spread this idea because, you know, knowledge is power, and when people don’t even know they have this option, th- they’ll sit stuck thinking they’re locked out of ownership.
Mel: And ownership, our tax system is made to reward owners, not earners. And so the faster you can become an owner, the more you can start to benefit from the system that’s built for you.
Maggie: I’m so glad you tripped and just fell into influencing. And, you know, I’m sorry that your dad had to pass and go [00:29:30] through Alzheimer’s to make this happen, but I think there’s some really, you know, fruitful things that have come up of this because it’s, you know, again, this incremental effect of these 300 people that you’re helping you know, help their neighbors and all of these different things.
Maggie: So with all of these experiences that you’ve had a question we like to ask everybody on our podcast is, what does financial freedom look like to you?
Mel: I think financial freedom is having options. You know, I am still a social worker. I am still trying to create [00:30:00] macro change national– I wanna build a national movement. But if I stayed in my social work job, and I lived it within those constraints that other people were handing me, my boss, my, you know, whatever it might be, and I gave them all my power, I’m locked into a life that I didn’t wanna live.
Mel: But if I believe enough in myself to take action and develop a new strategy and invest in that with all my time and effort and energy to get myself out of that job, then I have an endless amount of options for how I spend my time, whether it be with my family or my [00:30:30] friends or traveling or… I mean, my, my life has completely changed since I, I started investing in real estate.
Mel: And so, yeah, financial freedom is options.
Maggie: I love it. Thank you so much, Mel, for coming on today, for sharing your expertise. Everyone should, yeah, get your book, at least follow you on Instagram. Any time you come across a feed, I get, like, fired up and I’m like, “Oh, yeah, we gotta get back at this.” And yeah, or jump into the workshop. I think this, or the course, you know, I think this is gonna be really valuable for our community of women, a lot of people who are [00:31:00] busy but do wanna help their community and find, you know, a path to that financial freedom.
Maggie: So we appreciate you making this available and sharing your expertise today. So keep doing the great work.
Mel: Thanks, Maggie. It was my pleasure.
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