How do you pitch creative finance to a seller

Question

I finally got a good lead while cold calling but the seller is stubborn and wants too much of a high price. No I believe i can use this opportunity to offer creative finance, my problem is how would i do that.

Patricia Steiner · Answer

You know who always asks for 'creative financing?" People who don't have money, credit, or the knowledge to do the deal. And, you just said the seller wants too much for the property - and he's stubborn. What is the 'too much' based on in your estimation? Is he stubborn or does he simply know the value of his property?

I get these calls every day and every day I find that what is meant by 'creative' is will the seller carry the financing or do a rent to own or adopt the person. The answer is always no.

Be the real deal and find a deal that is priced right and within your means to acquire it. That's what serious and successful investors do...

Travis Goodwin · Answer

If a seller wants more than a cash buyer can pay, don't immediately pitch creative finance. First find out why they need that price. Ask questions about their timeline, motivation, and whether they need all the money at closing. A simple question like, "If I could get closer to your price, would you be open to receiving some of the money over time?" can tell you if they're open to creative terms. Focus on understanding their situation first, then determine whether a creative solution makes sense.

Andrew Caranto · Answer

I would not start by pitching creative finance. Start by finding the seller's pain. Do they need cash now, monthly income, tax deferral, debt relief, speed, or price? The structure should solve the constraint. If they need all cash now, terms probably will not land. If they care about price and income, seller financing becomes easier to explain. A great way to work this is to identify and empathize with their pain and find a way that you can structure the deal so that it offers a strong solution. Connecting with the seller will go miles farther than focusing on just the deal structure itself.

I've had great success just talking and listening to their experience and showing a clear understanding that I can see what they're going through and why it's causing their situation.

Chris Seveney · Answer

What do you consider creative financing? What are you attempting to accomplish? This is what needs to be spelled out. "creative financing" which to me is an overused term, typically only occurs when a seller is desperate and needs to sell OR if the seller is trying to shift some tax burden.

Create terms that work for you and make the offer is what you need to do. I would first ask if they would consider seller financing, if the answer is no - then you can move on to the next one.

If someone called me today and asked me to sell of course I would say yes, and I would throw a number 2x what it is worth.

How do you pitch creative finance to a seller

How do you pitch creative finance to a seller

Most Popular Reply

5 Replies