Do all the creative financing methods you hear about really work? Yes, well enough. They probably have all taken care of somewhere for someone at least once. The failing isn’t if they will all work for you. The matter in hand is to know what is possible, so you can find your own creative approaches to invest in real estate. at this juncture are ten procedures to get you thinking.

1. Hard money lenders. You can ask around or find these online. They specialize in short-term loans at high interest. You typically use this type of financing for a “fix and flip.” You can often get the money fast, and if you make $30,000 on a project, who cares if you paid $10,000 interest in six months.


2. No-doc and low-doc loans. No (or low) documentation of your income or credit required. Again, you can find banks that do these online now. The catch is that you will only be able to borrow up to 80% of the purchase price or property value. If you have 10% in cash, you by all accounts could be able to borrow the other 10% from a friend or the seller.

3. Seller-carried second mortgages. Sometimes a bank will loan you 90%, and allow the seller to take back a second mortgage from you for 5%, leaving you needing only 5% for a down-payment.

4. Land contract. Called “contract for sale” or focalized names as well, this just means the seller lets you make payments, and delivers the title upon payment in entire. I sold a rental this method for $1,000 down, because I wanted the 9% interest, and the higher price I got this system.

5. Credit cards. If a seller will take $10,000 down on a fixer-upper that you expect to make $20,000 on, why not use credit cards? This is a true 0-down deal for you, and if you turn the project in six months, you will have paid $900 in interest on an 18% credit card. Don’t let $900 get in the approach of making $20,000.

6. Retirement accounts. The laws get pretty complex in this scene, but you can stop with a tax attorney to see what ways you possibly could borrow from your own retirement account to finance real estate investments.

7. Friends and family. Keep it all business, if you use this source, but loaning you money at 7% isn’t a gift if their money is getting 2% in the bank.

8. Note buyers. The seller needs cash. He raises the price, and sells to you for $100,000 with no money down, taking back two mortgages from you for $90,000 and $10,000. He arranged (or you did) for a note buyer to pay him $80,000 cash for the first mortgage at closing, getting him the cash he wanted. You pay two payments now, one to each note holder.

9. Get a loan on contrasting property. Interestingly, if you take out a home equity loan for a vacation, and then forget to use it for that, you can make use of it for the down-payment on an investment property, without violating the results of the bank that gives you the primary mortgage. In contrasting words, you got in with no cash of your own.

10. Partnerships. For bigger projects, you could arrange for five investors to each put money into a partnership, with your share being the oversight responsibility instead of cash.

Related posts:

1. Real Estate Financing – Getting Creative
2. Don’t Sell Your Property Without It
3. Cheap Homes – Five Ways To Save Thousands
4. Success With Real Estate Investing