The Creative Financing Podcast

How to make multiple offers- This is really more of a mindset than anything else once you understand the basics and foundation of creative financing. Try structuring offers based on 3 or 4 different exit strategies. That will help you create different types of offers. Offers you can make every time are Cash, short term finance, long term financing, minimum 3yrs or 5yrs. Try to gauge down payment and terms they are open to 358K offer 5% down 10% down. 

Longer Term Offer- 5 to 7 yrs. This is more for an Owner Occupant or a Landlord if you are not holding the property yourself.  Always ask; How long would you like to continue to make money on your property. The Seller must make significantly more if they are holding a note long term because you really need to incentivize them. Offer a higher purchase price, downpayment, and/or interest rate, and show the Seller what they will net or gross at the end of the term. You want the longer term balloon payment to always be less than the shorter term balloon payment because you need more principal paydown over that time.

Subordination- This is where the Seller takes their equity in second position. We borrow the down payment in first position. Always consider what your payment will be on your first position note. You still need the payment to work for you. Plus you still need to offer the seller a note and monthly payment. These are longer term deals because. Offer 1. 358 Offer 2 350. Offer 3. 350 w/100K down. 250K in second position. 2.5% int. 900/month for 48months. 19k paydown. 

Wrap Around Mortgage or All Inclusive Trust Deed- If there is debt on the property, what do you do? It really depends on what that debt is and what the monthly payment is. If you can make a cash offer then you can make a short term financing strategy 6-12months, offer a down payment and offer to make the monthly payment. Ask if they are willing to wait on their equity, this strategy works if you can wholesale to a landlord or hold it longer term. Or if you can use it as an AirBnB or rent rooms out individually to create more cash flow. Break it into its component parts, 1 is debt, 2 is the Seller’s equity. Another option, You can offer to pay interest only payments on the Seller’s equity to keep you payment lower especially if the loan is further along in amortization to get more principal paydown. 

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

How to make multiple offers- This is really more of a mindset than anything else once you understand the basics and foundation of creative financing. Try structuring offers based on 3 or 4 different exit strategies. That will help you create different types of offers. Offers you can make every time are Cash, short term finance, long term financing, minimum 3yrs or 5yrs. Try to gauge down payment and terms they are open to 358K offer 5% down 10% down. 

Longer Term Offer- 5 to 7 yrs. This is more for an Owner Occupant or a Landlord if you are not holding the property yourself.  Always ask; How long would you like to continue to make money on your property. The Seller must make significantly more if they are holding a note long term because you really need to incentivize them. Offer a higher purchase price, downpayment, and/or interest rate, and show the Seller what they will net or gross at the end of the term. You want the longer term balloon payment to always be less than the shorter term balloon payment because you need more principal paydown over that time.

Subordination- This is where the Seller takes their equity in second position. We borrow the down payment in first position. Always consider what your payment will be on your first position note. You still need the payment to work for you. Plus you still need to offer the seller a note and monthly payment. These are longer term deals because. Offer 1. 358 Offer 2 350. Offer 3. 350 w/100K down. 250K in second position. 2.5% int. 900/month for 48months. 19k paydown. 

Wrap Around Mortgage or All Inclusive Trust Deed- If there is debt on the property, what do you do? It really depends on what that debt is and what the monthly payment is. If you can make a cash offer then you can make a short term financing strategy 6-12months, offer a down payment and offer to make the monthly payment. Ask if they are willing to wait on their equity, this strategy works if you can wholesale to a landlord or hold it longer term. Or if you can use it as an AirBnB or rent rooms out individually to create more cash flow. Break it into its component parts, 1 is debt, 2 is the Seller’s equity. Another option, You can offer to pay interest only payments on the Seller’s equity to keep you payment lower especially if the loan is further along in amortization to get more principal paydown. 

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

How to use down payment- We always talk about getting in light. What does that mean… well it depends on the property condition and price point. But most deals don’t work if your down payment is too high. We like to get in around 10% or less. A 20% down payment doesn't work in most cases if you were selling the property to an Owner Occupant or wholesaling it to a landlord because they can’t offer more than 10-20% down. So start with the end in mind, meaning what is your exit strategy? In some cases there is a way to offer more. If you are retailing it and can take over payments or structure financing with a reasonable monthly payment, then holding it short term and selling it outright in a couple months makes sense doesn't it? Or, also you can structure a seller subordination.

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

How to use down payment- We always talk about getting in light. What does that mean… well it depends on the property condition and price point. But most deals don’t work if your down payment is too high. We like to get in around 10% or less. A 20% down payment doesn't work in most cases if you were selling the property to an Owner Occupant or wholesaling it to a landlord because they can’t offer more than 10-20% down. So start with the end in mind, meaning what is your exit strategy? In some cases there is a way to offer more. If you are retailing it and can take over payments or structure financing with a reasonable monthly payment, then holding it short term and selling it outright in a couple months makes sense doesn't it? Or, also you can structure a seller subordination.

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

On this series we are talking about… The big 4 How To’s

How to talk to Sellers about creative financing- First of all, Don’t use the term seller or owner finance. It has a negative connotation. Use terms like payment for equity, are you open to terms or an installment. If you're open then there are multiple options we may be able to offer. I can put together a couple options and you can pick the best for you… Is that fair? If we can get you monthly cash flow without dealing with tenants, would that work for you. Use the same approach with every prospect, we buy properties using cash or terms. Are you open to taking payments for your equity. Let me explain how terms may work for you… With terms you become the bank and therefore we can pay you more for the property, not only top price but also you can continue to make money from interest. I'm not positive, but there may be some solutions that we can offer you that solves your problem. We can put together some offers and then we can present that to you and figure out what works best for you.

How to talk to Agents about creative financing- You need to understand in a hot market this is an uphill battle. You need to get their attention quickly. And it's harder with residential agents v.s. Commercial agents. The Agents need to know how they are going to get paid, first and foremost. Explain up front to the agent that you might be able to pay more than the asking price, you can get them paid up front at closing, and there will only be one agent involved so all the commission go’s to them so they can make more on their listing. Ask if their client may be open to terms and if/why that may not work. Don’t offer a downpayment if they ask, explain that you can put some offers together and see if any of them work for their client. Always ask why they think the property has not sold yet. You want the agent on your side. Always say you can net the Seller more if they choose one of your offers. AND ask if they understand the offer and if they can explain it to you. If not, then ask if you can go over it with their client together. Lastly, show exactly what the Seller will net in total on terms. And make sure your LOI is simple and answers questions up front. Convey all the positives, you want the agent to go sell your solution to their client.

How to write up the paperwork- Agents must use the state approved REPC, it may not be assignable, and may need to use addendums. Every contract needs to explain purchase price, down payment, earnest money, and then if owner financing there should be a separate section to fill out owner financing terms. Also add an addendum stating you are an investor seeking to make a profit, you may be assigning it to a partner, subject to inspection of the property, and closing to occur at your title company, closing to occur by specific date. The agreement will automatically be extended to resolve title issues. Seller finance addendum should be separate, stating terms, payments etc.  The most important thing is to have an attorney look over your REPC and addendums to cover any legal issues that could potentially arise. Don’t get caught up on this step and just ask another local investor for their REPC if you don’t have one.  

How to use down payment-

How to make multiple offers-

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

On this series we are talking about… The big 4 How To’s

How to talk to Sellers about creative financing- First of all, Don’t use the term seller or owner finance. It has a negative connotation. Use terms like payment for equity, are you open to terms or an installment. If you're open then there are multiple options we may be able to offer. I can put together a couple options and you can pick the best for you… Is that fair? If we can get you monthly cash flow without dealing with tenants, would that work for you. Use the same approach with every prospect, we buy properties using cash or terms. Are you open to taking payments for your equity. Let me explain how terms may work for you… With terms you become the bank and therefore we can pay you more for the property, not only top price but also you can continue to make money from interest. I'm not positive, but there may be some solutions that we can offer you that solves your problem. We can put together some offers and then we can present that to you and figure out what works best for you.

How to talk to Agents about creative financing- You need to understand in a hot market this is an uphill battle. You need to get their attention quickly. And it's harder with residential agents v.s. Commercial agents. The Agents need to know how they are going to get paid, first and foremost. Explain up front to the agent that you might be able to pay more than the asking price, you can get them paid up front at closing, and there will only be one agent involved so all the commission go’s to them so they can make more on their listing. Ask if their client may be open to terms and if/why that may not work. Don’t offer a downpayment if they ask, explain that you can put some offers together and see if any of them work for their client. Always ask why they think the property has not sold yet. You want the agent on your side. Always say you can net the Seller more if they choose one of your offers. AND ask if they understand the offer and if they can explain it to you. If not, then ask if you can go over it with their client together. Lastly, show exactly what the Seller will net in total on terms. And make sure your LOI is simple and answers questions up front. Convey all the positives, you want the agent to go sell your solution to their client.

How to write up the paperwork- Agents must use the state approved REPC, it may not be assignable, and may need to use addendums. Every contract needs to explain purchase price, down payment, earnest money, and then if owner financing there should be a separate section to fill out owner financing terms. Also add an addendum stating you are an investor seeking to make a profit, you may be assigning it to a partner, subject to inspection of the property, and closing to occur at your title company, closing to occur by specific date. The agreement will automatically be extended to resolve title issues. Seller finance addendum should be separate, stating terms, payments etc.  The most important thing is to have an attorney look over your REPC and addendums to cover any legal issues that could potentially arise. Don’t get caught up on this step and just ask another local investor for their REPC if you don’t have one.  

How to use down payment-

How to make multiple offers-

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

On this series we are talking about… The big 4 How To’s

How to talk to Sellers about creative financing- First of all, Don’t use the term seller or owner finance. It has a negative connotation. Use terms like payment for equity, are you open to terms or an installment. If you're open then there are multiple options we may be able to offer. I can put together a couple options and you can pick the best for you… Is that fair? If we can get you monthly cash flow without dealing with tenants, would that work for you. Use the same approach with every prospect, we buy properties using cash or terms. Are you open to taking payments for your equity. Let me explain how terms may work for you… With terms you become the bank and therefore we can pay you more for the property, not only top price but also you can continue to make money from interest. I'm not positive, but there may be some solutions that we can offer you that solves your problem. We can put together some offers and then we can present that to you and figure out what works best for you.

How to talk to Agents about creative financing- You need to understand in a hot market this is an uphill battle. You need to get their attention quickly. And it's harder with residential agents v.s. Commercial agents. The Agents need to know how they are going to get paid, first and foremost. Explain up front to the agent that you might be able to pay more than the asking price, you can get them paid up front at closing, and there will only be one agent involved so all the commission go’s to them so they can make more on their listing. Ask if their client may be open to terms and if/why that may not work. Don’t offer a downpayment if they ask, explain that you can put some offers together and see if any of them work for their client. Always ask why they think the property has not sold yet. You want the agent on your side. Always say you can net the Seller more if they choose one of your offers. AND ask if they understand the offer and if they can explain it to you. If not, then ask if you can go over it with their client together. Lastly, show exactly what the Seller will net in total on terms. And make sure your LOI is simple and answers questions up front. Convey all the positives, you want the agent to go sell your solution to their client.

How to write up the paperwork- Agents must use the state approved REPC, it may not be assignable, and may need to use addendums. Every contract needs to explain purchase price, down payment, earnest money, and then if owner financing there should be a separate section to fill out owner financing terms. Also add an addendum stating you are an investor seeking to make a profit, you may be assigning it to a partner, subject to inspection of the property, and closing to occur at your title company, closing to occur by specific date. The agreement will automatically be extended to resolve title issues. Seller finance addendum should be separate, stating terms, payments etc.  The most important thing is to have an attorney look over your REPC and addendums to cover any legal issues that could potentially arise. Don’t get caught up on this step and just ask another local investor for their REPC if you don’t have one.  

How to use down payment-

How to make multiple offers-

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.

So today we're going to discuss how to use a hybrid interest rate, as it relates to putting together creative financing offers, and the difference between an amortized loan. Jeff gets a lot of questions about this, and we've talked about this a lot throughout different episodes that we've done. So this episode will show you how to figure it out and then how to use it in your business. 

So today on the podcast Jeff is going to discuss how to use a hybrid interest rate, as it relates to putting together creative financing offers, and the difference between an amortized loan. Jeff gets a lot of questions about this, and we've talked about this multiple time throughout different episodes that we've done. So this episode will show you how to figure it out and then how to use it in your business. 

8 plex, super clean, townhome style, rent for 5200/month. Asking 650. Should rent for 850/month. Seller manages. No longer wants to deal with daily ops.

Made 4 offers around 650K range at 10% down

Original Offer was 640 pp 75K down 3.85% $2,648 pmt for 60 months. 

Seller countered at 3K/month at 5%. 

Amortized offer 645K pp 75K down at 4.15% for 5yrs. 

Blended principal/interest offer- 670K pp, 70K down, 1st yrs principle only. Then blended interest 4.15% for the next 2 years. Then 4.5% for the last 2years. Seller Net 764850 over 5yrs.

Hybrid interest offer 680K pp 60K down 2.95 pmt 2700/m 60 months. 

Subordination 770K pp 100K down bal 670K. 2000/month principle only for 60 months. 1st note 500/month. 2nd note 2000/month in principle only. 

Write in a release of lien clause to be able to sell townhomes separately, with equalization payment.

Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.