Creative Financing

Depending on a home seller’s situation or need to sell, there are some great ways to buy property creatively with real estate investing. First off, you can buy properties that are already “for sale” on the MLS with an agent and make offers that way. But, if you want to pick up properties without the hassles of real estate agents, and make creative deals happen, then you need to market to sellers that need or want to sell their property quickly. I know a guy at roofing Roswell, GA that has this down pat.

There are certain lists that you can purchase in order to market to direct sellers without going through an agent. Some of those example lists would be absentee owners, vacant property lists, and expired listings. Having these lists of home owners enables you to direct mail these people with postcards or letters indicating that you want to buy their property. Once the motivated ones call you, you can then schedule an appointment to go out and see the house and the repairs that are needed, the mortgage terms, if they are behind on payments, in foreclosure, etc. Knowing all of these answers will enable you to make an offer to purchase which sometimes can be creative, allowing you to pick up properties with little to no money down, have the seller finance your purchase, and buy at a nice discount. You can’t get those types of creative terms when buying on the MLS with making offers with your agent, because there is only one way to buy the properties using that approach. You would have to pay cash as an investor, or be able to qualify for bank financing in order to close the deal on a house that is listed with an agent.

Which leads me to discuss the endless possibilities of working directly with home owners who can strike up creative deals with you as a buyer, and willingly! At last check, the banks will only allow you to have 5 or maybe 10 mortgages now in your name. So…that limits the amount of properties you can purchase. With creative financing, you can purchase unlimited properties because there would be no mortgage in your name, so you don’t get scrutinized every time you go to buy an investment property. We have been able to work out some crazy good deals with home sellers who just couldn’t sell their property with an agent for whatever reason, or don’t want to do the repairs necessary to bring up it to market standards. That gives you a great possibility to work something out with these home sellers that perhaps can be creative, like making payments to the seller for their equity in the property. One example would be, if they own the property free and clear, is to make an offer for close to full price on the house, but with excellent terms where the seller finances the equity for you. So instead of you having to go to the bank to qualify to purchase the property and go through the financial colonoscopy, you can have the seller finance the purchase and take back a mortgage. You would then make payments to the seller for a pre determined amount of years and get killer terms on the property! Sometimes you can get 0% financing on these deals if you offer the seller full price, but it is always 100% negotiable, which is the greatest part of working directly with sellers.

Working directly with homeowners on these deals is the best way real estate investors can expand their holdings and deal flow since you can really help sellers, and get great terms as well. Buying homes on terms is the holy grail of real estate investing, and if you learn how to do so, your income is truly unlimited. I hope this post opens your eyes to some of the off market and non standard ways of buying real estate without having to get a bank loan, or paying all cash.

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