If you buy real estate with bank financing, you have to give up a lot of personal information for the loan application, pay all kinds of junk loan fees, then wait, wait, wait for loan approval. You are also personally liable for the loan and you will usually need a large down payment for a non-owner occupied purchase.
If you buy real estate using private lenders or hard money lenders, they usually control the terms and interest rates.... high interest rates. Some will insist on getting 50% of your profits.
In both cases, you are at the mercy of someone else to say YES or NO to your request for financing. If they say no, you will lose the deal.
A much better way to buy real estate is with creative seller financing. It is easier to get than you think... IF you are working directly with a seller who is very motivated.
With creative seller financing, you are often able to buy with no money down and no or very low interest rates. Sometimes, payments can even be delayed for a year or more. You might make only one payment per year instead of monthly payments. The financing can be creatively structured to fit the opportunity, your needs, and the seller's needs.
In my 20 years of real estate investing, I was able to buy hundreds of properties with creative seller financing and/or subject to the mortgage.
The secret ingredient is to be dealing directly with the seller. They must be motivated to sell quickly for some reason. You absolutely cannot be working with a real estate agent or any other middle person.
"Creative Financing" is a phrase that describes terms that aren't available from institutional financing. By definition then, except for deals made between professionals, creative financing depends upon financing provided by a motivated seller.
It follows that the more a buyer knows about the needs and goals of the seller, the wider the scope of financing possibilities. In turn, the more time and effort the buyer invests in discovering the needs of the seller, and meeting these needs in the transaction, the more successful he or she will be in getting seller's to accept a creative offer.
READ the REST of the Story here
If you buy real estate using private lenders or hard money lenders, they usually control the terms and interest rates.... high interest rates. Some will insist on getting 50% of your profits.
In both cases, you are at the mercy of someone else to say YES or NO to your request for financing. If they say no, you will lose the deal.
A much better way to buy real estate is with creative seller financing. It is easier to get than you think... IF you are working directly with a seller who is very motivated.
With creative seller financing, you are often able to buy with no money down and no or very low interest rates. Sometimes, payments can even be delayed for a year or more. You might make only one payment per year instead of monthly payments. The financing can be creatively structured to fit the opportunity, your needs, and the seller's needs.
In my 20 years of real estate investing, I was able to buy hundreds of properties with creative seller financing and/or subject to the mortgage.
The secret ingredient is to be dealing directly with the seller. They must be motivated to sell quickly for some reason. You absolutely cannot be working with a real estate agent or any other middle person.
"Creative Financing" is a phrase that describes terms that aren't available from institutional financing. By definition then, except for deals made between professionals, creative financing depends upon financing provided by a motivated seller.
It follows that the more a buyer knows about the needs and goals of the seller, the wider the scope of financing possibilities. In turn, the more time and effort the buyer invests in discovering the needs of the seller, and meeting these needs in the transaction, the more successful he or she will be in getting seller's to accept a creative offer.
READ the REST of the Story here
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