The Creative Financing Podcast

#200 Using Zero Percent Interest To Buy A Commercial Building

This is part 2 of "Zero Percent Financing". It starts off with a short review of examples from Part 1 (Episode 199) and we break down why zero percent interest is so powerful. There are three commercial building case studies in this episode, one is a strip mall, an apartment building located in California, and a property where the seller requested long-term financing vs cash. 

~ Want to ask a question? Submit yours in The Creative Financing Facebook Group https://www.facebook.com/groups/866386383888309

~ Join the Apprenticeship program: email [email protected]

~ Join the Creative Financing Academy: email [email protected]

~ Follow The Creative Financing YouTube Channel

https://www.youtube.com/channel/UCV-9Y9aUMujD-6L9u0akuww

~ Follow The Creative Financing Facebook Page

https://www.facebook.com/TheCreativeFinancingPodcast

~~ Connect with Jeff on Facebook

https://www.facebook.com/jeff.rappaport.756

~~ Connect with Cody on Facebook

https://www.facebook.com/profile.php?id=100010035768907

~~ Connect with Nicole on Instagram: @NicoleNikki_K or https://www.instagram.com/nicolenikki_k/

In this episode, Jeff introduces his new co-hosts Cody Richard and Nicole Kemanjian. What to look forward to as the podcasts continues on. In part 1 of Zero Percent Financing - They discuss the power of zero-interest financing as well as its downfalls. How to use a financial calculator and which financial calculators to use. Jeff covers a few examples of zero percent interest deals. To follow along with calculations make sure to check out the episode on The Creative Financing YouTube Channel.

Financial Calculators Mentioned:

1. Free Apps - Ez Calculators, fncalculator.com, bankrate.com

~ Want to ask a question? Submit yours in The Creative Financing Facebook Group

~ Join the Apprenticeship program: email [email protected]

~ Join the Creative Financing Academy: email [email protected]

~ Follow The Creative Financing YouTube Channel

~ Follow The Creative Financing Facebook Page

~~ Connect with Jeff on Facebook:

https://www.facebook.com/jeff.rappaport.756

~~ Connect with Cody on Facebook: 

https://www.facebook.com/profile.php?id=100010035768907

~~ Connect with Nicole on Instagram: @NicoleNikki_K or https://www.instagram.com/nicolenikki_k/

Episode 199

#198: pt.4 Q&A With Jeff’s Apprentices

In this series, we take questions from Jeff’s apprentices who are currently in his program. They ask some great questions and this will help you further understand creative financing from a macro perspective. Here are the following questions we answer for these apprentices…

Why would a Seller consider taking a terms offer over selling out right? 

How much more do the Sellers nets by taking terms?

What is the Seller's security in taking a terms offer?

What is one of the major trends in wholesaling right now? 

Do you send the same type of offers every time?

For someone just starting in creative financing, what's the first term offer one should start using?

How can you ensure payments get passed on to my heirs?

Can you still offer terms on a property where the Seller is looking to do a 1031 exchange?

How do you protect yourself in the event of a market crash?

Do you pre-negotiate extensions on terms?

What do you do with the property at the end of the term when the balloon is due?

Are there any types of loans that you can’t use creative financing loans such as FHA or VA or Reverse mortgage loans?

If you buy a property on owner finance, can you sell the property before the end of the term?

How do I use creative financing as a flipper or buy and hold investor?

How do you structure terms if a seller won’t take any less than 20%?

How to best work with investors to buy the property yourself rather than wholesaling it?

How do you work with a Seller who has an exceedingly high mortgage payment?

How do you set up a tenant/owner occupant for success to buy the property at the end of the term.

What offers do you get accepted the most and why?

Do you get the tax benefits on owner financing?

Can I sell my property on a subject to?

What are the benefits for agents to work with us on a term offer for their client?

In this series, we take questions from Jeff’s apprentices who are currently in his program. They ask some great questions and this will help you further understand creative financing from a macro perspective. Here are the following questions we answer for these apprentices…

Why would a Seller consider taking a terms offer over selling out right? 

How much more do the Sellers nets by taking terms?

What is the Seller's security in taking a terms offer?

What is one of the major trends in wholesaling right now? 

Do you send the same type of offers every time?

For someone just starting in creative financing, what's the first term offer one should start using?

How can you ensure payments get passed on to my heirs?

Can you still offer terms on a property where the Seller is looking to do a 1031 exchange?

How do you protect yourself in the event of a market crash?

Do you pre-negotiate extensions on terms?

What do you do with the property at the end of the term when the balloon is due?

Are there any types of loans that you can’t use creative financing loans such as FHA or VA or Reverse mortgage loans?

If you buy a property on owner finance, can you sell the property before the end of the term?

How do I use creative financing as a flipper or buy and hold investor?

How do you structure terms if a seller won’t take any less than 20%?

How to best work with investors to buy the property yourself rather than wholesaling it?

How do you work with a Seller who has an exceedingly high mortgage payment?

How do you set up a tenant/owner occupant for success to buy the property at the end of the term.

What offers do you get accepted the most and why?

Do you get the tax benefits on owner financing?

Can I sell my property on a subject to?

What are the benefits for agents to work with us on a term offer for their client?

In this series, we take questions from Jeff’s apprentices who are currently in his program. They ask some great questions and this will help you further understand creative financing from a macro perspective. Here are the following questions we answer for these apprentices…

Why would a Seller consider taking a terms offer over selling out right? 

How much more do the Sellers nets by taking terms?

What is the Seller's security in taking a terms offer?

What is one of the major trends in wholesaling right now? 

Do you send the same type of offers every time?

For someone just starting in creative financing, what's the first term offer one should start using?

How can you ensure payments get passed on to my heirs?

Can you still offer terms on a property where the Seller is looking to do a 1031 exchange?

How do you protect yourself in the event of a market crash?

Do you pre-negotiate extensions on terms?

What do you do with the property at the end of the term when the balloon is due?

Are there any types of loans that you can’t use creative financing loans such as FHA or VA or Reverse mortgage loans?

If you buy a property on owner finance, can you sell the property before the end of the term?

How do I use creative financing as a flipper or buy and hold investor?

How do you structure terms if a seller won’t take any less than 20%?

How to best work with investors to buy the property yourself rather than wholesaling it?

How do you work with a Seller who has an exceedingly high mortgage payment?

How do you set up a tenant/owner occupant for success to buy the property at the end of the term.

What offers do you get accepted the most and why?

Do you get the tax benefits on owner financing?

Can I sell my property on a subject to?

What are the benefits for agents to work with us on a term offer for their client?

In this series, we take questions from Jeff’s apprentices who are currently in his program. They ask some great questions and this will help you further understand creative financing from a macro perspective. Here are the following questions we answer for these apprentices…

Why would a Seller consider taking a terms offer over selling out right? 

How much more do the Sellers nets by taking terms?

What is the Seller's security in taking a terms offer?

What is one of the major trends in wholesaling right now? 

Do you send the same type of offers every time?

For someone just starting in creative financing, what's the first term offer one should start using?

How can you ensure payments get passed on to my heirs?

Can you still offer terms on a property where the Seller is looking to do a 1031 exchange?

How do you protect yourself in the event of a market crash?

Do you pre-negotiate extensions on terms?

What do you do with the property at the end of the term when the balloon is due?

Are there any types of loans that you can’t use creative financing loans such as FHA or VA or Reverse mortgage loans?

If you buy a property on owner finance, can you sell the property before the end of the term?

How do I use creative financing as a flipper or buy and hold investor?

How do you structure terms if a seller won’t take any less than 20%?

How to best work with investors to buy the property yourself rather than wholesaling it?

How do you work with a Seller who has an exceedingly high mortgage payment?

How do you set up a tenant/owner occupant for success to buy the property at the end of the term.

What offers do you get accepted the most and why?

Do you get the tax benefits on owner financing?

Can I sell my property on a subject to?

What are the benefits for agents to work with us on a term offer for their client?

Scenarios in which you want to use lease options vs contract for deed. 

1. Avoid hefty title transfer fees and tax.

Example of wholesaling a Lease Option-  SFH worth 550K Buy on lease option for 505K with 2K down. Find a tenant buyer for 522K with 17K down. With 2K monthly lease payment. Take 15K as a wholesale fee.

Master lease option example- best to use on investment properties with value add opportunity. Where you have a lease with the owner and can sublease the units. Owner is responsible for capital repairs/expenses, taxes, and insurance. The owner no longer has to manage the property or hire a management company. 

Example 20 unit apartment building, 10- 2beds 10- 1beds by a university. 150K in deferred maintenance. Owner will have a large tax consequence when he sells because he depreciated it over 27.5 years. The heirs want him to hold the property till death to avoid tax consequences. Rents are below market and can be increased. Charge pet rents. Chargeback sewer/water/garbage to tenants, add storage units, ect. Offer to pay 80K as option deposit.

Scenarios in which you want to use lease options vs contract for deed. 

1. Avoid hefty title transfer fees and tax.

Example of wholesaling a Lease Option-  SFH worth 550K Buy on lease option for 505K with 2K down. Find a tenant buyer for 522K with 17K down. With 2K monthly lease payment. Take 15K as a wholesale fee.

Master lease option example- best to use on investment properties with value add opportunity. Where you have a lease with the owner and can sublease the units. Owner is responsible for capital repairs/expenses, taxes, and insurance. The owner no longer has to manage the property or hire a management company. 

Example 20 unit apartment building, 10- 2beds 10- 1beds by a university. 150K in deferred maintenance. Owner will have a large tax consequence when he sells because he depreciated it over 27.5 years. The heirs want him to hold the property till death to avoid tax consequences. Rents are below market and can be increased. Charge pet rents. Chargeback sewer/water/garbage to tenants, add storage units, ect. Offer to pay 80K as option deposit.

In this series we talk about understanding creative financing, the strategies used, and the pro’s and con’s of each. Here are the different strategies and how they pertain to the following …

Title Transfer 

Foreclosure

Taxes

Due on Sale Clause

Maintenance and Repairs, 

Closing and Transfer tax

1. Lease Options- No title transfer, so no closing or transfer tax, no foreclosure, only eviction. No Due on sale. Maintenance can be passed on to the tenant. Taxes are typically paid by the Landlord.

In this series we talk about understanding creative financing, the strategies used, and the pro’s and con’s of each. Here are the different strategies and how they pertain to the following …

Title Transfer 

Foreclosure

Taxes

Due on Sale Clause

Maintenance and Repairs, 

Closing and Transfer tax

1. Lease Options- No title transfer, so no closing or transfer tax, no foreclosure, only eviction. No Due on sale. Maintenance can be passed on to the tenant. Taxes are typically paid by the Landlord.