What's the most creative way you've paid for a property/expense?

Question

What's the most creative way you've used - or know of someone else successfully using - to finance a property (in whole or in part), or some expense associated with it?

Jason Dillard · Answer

@Suzanne Player silly putty.

Silly putty can be stretched, cut, push together, take on shape of what’s it’s wrapped around, and it even can be bounced around.  Created Paper is Real Estate’s silly putty.

Created paper can have any term, rate, or value.  It can have no payments, big payments, or negative payments.  It can be secured by nothing, real property, private property, and and even other paper.  It can bounce its collateral from one thing to another. It can be used to buy property or pay off debt.  It can be discounted for cash in whole or parts.

Silly putty.

Curt Smith · Answer

Hi Susanne, I see you're an agent.  This is a deal type that is a win win, win for the investor who knows how to execute and a win for a stuck seller with little equity or a house needing lots of repairs AND they have too much debt (a mortgage).  You may not run across many of these given huge appreciatoin in the market.  BUT folks who just bought 2-5 yr ago with VA/3%/5% down programs may not have enough equity to get through an MLS listing sale and pay the commisisons at closing,,, withing out coming out of pocket.

I'm talking about buying 'subject to the existing financing" or just subject-to.  IE you offer to get a stuck and motiviated seller out from under their mortgage payments by:   you offer to buy their house (they sign over the warrantee deed) but they agree to leave the mortgage in place and you agree to take over the payments.  I have bought a few sub-tos and in only one case did I offer to pay $2k to the seller,,, and pay for the closing.   My lowest out of pocket to buy a nice 4 sided brick 3/2 around 1400sqft house was $1.5k.  Typical is $3k to 4k, covering closing and some pocket money for the seller.

I'm on the hook to pay the mortgage,,,, but I now own a house that once fixed up will cash flow $300 to $500/mo.   My typical fix up is $20k and after rehab value in the $120k $140k range and the debt I've taken over ranging from $60k up to $120k.   So some times I get equity but house is totally trashed, other times no equity and its still trashed.   LOL but I won't do the deal if I don't like the house, the area AND will cash flow >>$300/mo and is in a decent area.

I have a training I give away to help folks learn sub-to.  Connect/PM me.  Its very complicated to do it right.

As a general education;  buy BP's Zero Down book and all other "creative financing" books.  Knowledge makes you more money then having cash to buy houses.  With knowledge you need very little cash.

But today with appreciation, motivated sellers are hard to find.  You being an agent can put the word out in your agency that you'll pay $500 referal for leads to sellers who are stuck, no equity, a trashed house with a mortgage who need to get out from under the payments.  Covid has created a few of these due to job loss, under employment.  Just bought <3,4,5 yr ago with a small down loan...

Buying on a lease option (also creative) the sellers often want a small down / option fee to lock it up.  Fewer sellers who'll sell on a lease option since they have equity and a nice house they can list.   But the books are full of stories of buying LO as well..

Suzanne Player · Answer

Wondering if anyone’s used Bitcoin/ cyber currency or has a creative use of gift cards, Amex points, etc to purchase goods or services for their property, or used a barter organization.

Suzanne Player · Answer

Not many people think of buying subject to existing financing, but this can work.  It's a good idea to have an attorney read the actual terms of the financing, there's often a due on sale clause.

Great point: Knowledge makes you more money then having cash to buy houses.  With knowledge you need very little cash.