Creative Financing to fund a deal.

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Creative Financing to fund a deal.

Kyle Buchanan
Member since 2021 · 3 posts · 0 votes

Hey Guys. I'm a new investor from Ontario Canada. I was wondering about creative financing and how it works. I currently own one rental but am finding it difficult to save for a down payment so was looking into creative financing. Looking for some advice on the process. 

Thanks Kyle 

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  • Brett Deas
    CO · Member since 2022 · 588 posts · 426 votes
    3y

    This is a very open-ended question, there are so many ways people use creative financing, hence the creative part. If you are worried about DTI parts I could recommend subject-to so you don't have to qualify for the loan, just make the payments on it. Or you can find financing partners to qualify for you. Or you can pursue seller financing where they are the bank and thus you won't have to qualify either.

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    3y

    @Kyle Buchanan

    Today’s investors should be equipped with not one but several financing options before approaching a deal. Going straight to a traditional lender for a mortgage may seem simple, but this approach will not always guarantee the best loan terms. In many cases, finding the best financing will require investors to get a little creative. That being said, there are so many unique ways to finance real estate it can be hard to fully understand what’s out there. The following creative financing options are a great place to start:

    1. Cash-Out Refinance
    2. Home Equity Line Of Credit
    3. Personal Loan
    4. Seller Financing
    5. Lease Option
    6. Self-Directed IRA
    7. Hard Money
    8. Private Money
    9. FHA Loans
    10. Crowdfunding
    11. Cross Collateral

    Read this article for more information https://www.fortunebuilders.co...

    All the best!

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  • Mohammed Rahman
    Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
    3y

    Hey @Kyle Buchanan - I understand what you're asking, but just an FYI it would be more helpful for you to be specific in subsequent posts. 

    As you may already know, "creative financing" covers a lot of different topics and can mean different things to different people. For example, creative financing to me is getting a private lender on board one of my deals and creating a partnership split that works for everyone. 

    Creative financing for you might mean a DSCR loan.

    If I'm in your shoes, and you're in the situation of having low funds for another down payment, I'd work with a local lender in your market to see if they offer DSCR loans... that will help you with the approval and underwriting. Good luck ;)

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Have any specific questions? 

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