Banks a Problem? Why Creative Financing May Work For You

[Ken M.]

Is it better to put down 20% and use a bank loan or is it better to Take Over Existing Loan - How Do I do that?

That's a loaded question. It depends on whether you are using current investing methods that include a bank or if you are using creative financing.
Here is the difference. So, if you are fairly well funded ($50,000 cash) you can buy 3 times as many properties and get much more equity and cash flow using creative finance.

New Bank Loan	Traditional		Subject To	Take Over Existing Loan - has
				already been paid down some
Purchase Price	$400,000		$332,196	(Take over existing loan)
Down 20%	$80,000		$10,000	To Seller
Loan Amt	$320,000		$332,196	(Take over loan)
New Loan Payment Rate 7.75%	$2,293		$1,465	Take Over Payment Rate 3%
Difference			$828	Your Savings per month
Other	$0		$0	other
Loan Origination Fees 2%	$6,400		$6,400	Your Savings On Loan Fees
Closing Costs	$3,500		$3,500	Closing Costs
Cost for length of Loan	$825,307		$490,512	Your Cost for length of Loan
			$334,795	Your Savings over
				Life of the Loan
Using Bank Cost to acquire	$89,900		$13,500	Cost of Using Us to acquire
			$76,400	Your Savings Just By
				Buying Using Subject To
Total Savings			$411,195	Your Savings Total
				w/Subject To