TOP 3 Creative Financing Strategies
The key is being a dynamic real estate investor. Make sure you’re diverse. Don’t just be a one trick pony. Don’t just be a wholesaler wholesale buy and hold, fix and flip wholesale do innovations do all of it that is what’s going to keep you around for the next 15,20,30 years, making a whole lot of money and building a whole lot of wealth.
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Yo, yo, welcome back to the science of flipping podcast. I am your host, Justin Colby. In this episode is about my top three ways to do creative finance deals. As the market is changing, make sure you stay tuned. Now, as always, we are brought to you by our main sponsor, minutepages.com, minutepages.com is websites for real estate investors. Specifically, they handle all of the SEO, all the content, two blog posts a week, and they make sure that when you give your website to a seller, an agent, a contractor that is professional, and exactly what can help you get more good deals. Now we all know it’s all about credibility, influence and authority in our space. And these websites at a fraction of the cost will give you just that you will become the guy or gal in your market that owns your market with credibility, influence and authority. So if you want that webpage at a fraction of the cost go to minutepages.com
Alright guys, so welcome back to this episode, we are jumping into my top three creative structuring deals in today’s market. Now we all know the real estate market is crazy right now meaning the interest rates are up, everyone’s in a big hoopla inflation is up. So let’s just get straight to the point of how you can potentially create more deals by the same amount of leads that you currently have. Now one thing I can tell you is I just came back from an incredible event in Milwaukee, Wisconsin. Such a great crowd there, Tony Romero, his partner, Scott, they put on an incredible event top notch through and through the speaker lineup was phenomenal. And I will say that one of the big takeaways is people are out marketing creating leads, but their conversion is down and the reason why their conversion is down not because the sellers necessarily want too much money. But it’s because they aren’t able to actually get a price that their end buyers willing to take. The reason being is because the markets crazy to end buyer usually a fix and flipper. They just aren’t as aggressive when buying homes right now. So let me tell you three top strategies that can get you the deal. And you can wholesale it or even keep it as a rental if you structure the terms, right. So the first one I like will be subjected to I’m looking to buy two homes right now in Charlotte, North Carolina, where I’m negotiating with the seller that I’m going to give them a certain amount down to so they could liquidate their equity, but I’m going to keep their loan in place because the interest rate is 5%. Now that’s not ideal for the seller. But they also understand I can still give them top dollar, because I’m going to be able to use their loan versus getting a loan right now that’s 7%. Now this property, so happens to already be rented. They run a berm model in terms of the investor I’m buying it from so they’ve already bought it, they remodel it, they already have a renter. So for me, it’s just an ROI, right, I’m looking at the cash on cash return. So I made an offer, giving them their equity out of the home, I keep the loan in place. And we’re hoping to finalize that this week, I’ll keep you posted. So subject to is going to be my number one way to approach this, my number two way to approach this right now will be innovations, we’re doing a really good job being able to contract properties at a higher price that the sellers want, because the properties don’t need a massive amount of work. Now innovations very specifically have been around for a very long time I’ve been no waiting houses for the better part of 10 years.
The difference being is the definition today is changed from what it was years ago. So now essentially what I’m doing is I’m getting the rights to market the property even on the MLS with the Novation language. Once I have the Novation agreement, then I can actually not just market it to my buyers but I also get the authorization to market it on the MLS. What does that do for me it opens up my buyer pool so that there are buyers out there that will pay a higher retail price a because they’re gonna live in it or be because they don’t know the wholesale game and they’re just a buyer that would find something on the MLS. They are a novice to the industry. Both work and both can help us make more money from a lead. That wouldn’t be a deal if I was just making a cash offer and number three He would be either a wrap deal or straight up seller financing. Right now I’m actually looking in negotiating with the seller where they owned the home free and clear. And I’m looking to help them understand what it would look like for them to become the bank and sell me the property. They’re a little bit older, so it’s taking me a little bit longer to get them through this process and help them understand the value that it brings. But in this property, I’m looking at giving them an extra $30,000 relative to their purchase price, they want 589, I’d be giving them roughly 615 or 620, as built in interest, meaning every payment I make moving forward will be principal payments only, there will be zero interest, principal payments only, and a five year balloon will that 60 months of me paying principal payments only. So I’m going to have a decent amount of equity over the next five years because I’m paying down the principal with no interest. Again, challenges a little older. So as it’s a slower process for me to help educate them on why this would make any sense. That’s a true seller finance deal along with that would be a wrap deal where maybe they have a smaller loan, they also become a bank in our in part or position to they give me a loan for their equity. And then I’m paying them as a bank and the bank as a bank right at the bank mortgage so they can actually sell me the home and they are getting still monthly income from the loan they gave me and I’m paying off the bank loan themselves. Those are the top three right now that we are working in our business in this very dynamic market.
If you liked this video you liked the subject matter smash the like button, make sure to subscribe to my channel and share this podcast episode. If you’re on iTunes, make sure you give me a five star review. I greatly appreciate it. Alright guys, so there you have it. These are the top three strategies we’re using right now. The key is being a dynamic real estate investor. Make sure you’re diverse. Don’t just be a one trick pony. Don’t just be a wholesaler wholesale buy and hold fix and flip wholesale. Do Novations do all of it. That is what’s going to keep you around for the next 15,20, 30 years. Making a whole lot of money and building a whole lot of wealth. I’ll see you guys on the next episode. Peace
