Jimmy Napier - Fix the Financing

Jimmy Napier used to teach a course he called fixing the financing. The gist of it was that an

Investor could profit by buying (or investing in) real estate where either a “bad” loan encumbered the

property or the owner was unable to obtain a loan at all. Jimmy presented this as an alternative to the

typical “flip n flip” which he called “fixing the real estate”.

A entire book could be written on just a few of his techniques, but I’ll just provide a quick summary of

some of them. If anyone would like greater details on any of these, just respond to this thread with your

question. Comments, especially from investors who used one of these techniques, or something similar,

are of course most welcome.

1 - Use your good credit in exchange for property ownership. For a property encumbered with an ultra

high interest (hard money) loan, and which the borrower can’t qualify for conventional/institutional

long term, low fixed rate financing, the investor can negotiate a percentage ownership of the

property in exchange for their ability to refinance the property with a much lower rate loan. I’ve

chronicled in other threads how my partner and I obtained a 60% ownership in a 26,000 sf retail/

service center by replacing a 16% loan with a 4% bank loan.

2 - Same scenario as above. Investor previously purchased a property with owner financing at 0 or low

interest rate with SUBSTITUTION OF COLLATERAL clause. Sell the property the loan is secured by,

and MOVE the mortgage (substitute collateral) to the subject property again in exchange for

ownership interest.

3 - For property encumbered with previously owner financing, Negotiate to buy a property at fair value,

then offer to buy existing loans at 30 - 60% discount.

4 - Same as above, offer note holder some cash pay down to restructure the note at 0 interest over

longer term of 7 - 10 years.

5 - Buy property at full price with 0% owner financing and 10 - 15 year term. Resell property for same

price with wrap loan at 8%