Articles - Creative Financing 101

Creative Financing 101 – How to Not Get Lured Into the Strategies That Don’t Work in Our Market

The most common idea behind creative financing is the idea of acquiring a piece of property with little effort, minimal if any risk, no cash-some cash-sellers cash or even private money cash on a deal where you will make a large profit in a very short period of time. These deals do happen and yes they happen to new investors. But for every one deal a new investor completes a seasoned investor will complete ten of them.

The difference is in knowing who to bring in to complete the deal, what strategy to use when analyzing properties, how to structure the deal and when to sell to realize the highest profit potential of the property. At our real estate investment club I teach a class where we review one of the most commonly and uncommonly applied financing tactics in residential real estate. We go over many ideas that are highly marketed by the gurus - you may be surprised at what they teach and begin to wonder what planet they are from. Some ideas are very, very solid and are time tested and proven to be good pieces of knowledge to have. This is great for new investors because it will be a very powerful, very fact-filled, no-hype review.

Most new investors are lured into real estate investing because of polished get rich pitches from seminars and late night infomercials. This really clears the air on where to focus your time, energy and money. This is great for experienced investors for several reasons. Experienced investors hate being sold on these same old get rich-no money-no risk stuff. As experienced investors also know, it is important for them to keep expanding their knowledge set.

By keeping an open mind and getting different opinions and reviews of subject matters that they had made previous decisions on, they allow themselves the potential to validate their decision that a niche or strategy is not for them at this time, is not for them at all or is the for them to use right away. It is common for an experienced investor to analyze a property with five to ten strategies. If an investor is not doing this already then this is a must for them to consider. There is no reason to be passing on deals that could otherwise be completed and being added to an investment portfolio as we speak.