No Money Down! Does Your Agent or Broker Understand Creative Financing?

Real Estate Agent with BMC Capital

I read a blog post on today that really bothered me.  I'm not going to link to the post, because it is one of several that I have seen.  The author was an agent that was bashing the use of creative financing.  He stated that these techniques don't work and that the people using them are tire-kickers and dreamers.  What was more surprising was that there were pages of comments from other agents and brokers that agreed and said that they don' twork with 'those types' of clients.  I will admit that there are a lot of people out there that have read a real estate book they bought off of a late night infomercial, that have no idea what they are doing, and may never buy a property.  However, there are also several successful real estate investors that buy properties with none of their own money.  I'm sure there are some people out there saying that they've never met such an investor, so let me introduce you to one, me.  I've personally purchased 4 properties (13 units total) with absolutely none of my own money.  All it took was a little creativity, and a lot of leg work.

Did you notice that last part, the leg work?  That is the reason why many agents and brokers will tell potential clients that creative financing doesn't work.  It is usually easier for them to work with cash buyers, or buyers with substantial down payments.  In this market however, there are several great deals available, and not enough cash buyers.  This is why I encourage clients to get creative when investing in commercial real estate in Reading, PA.  So what does this mean?  Does it mean that you don't need any money?  Does it mean that you don't need any income or credit?  Do you have to have a business plan?  Well, it depends.  You don't need a lot of cash, good credit, lots of experience, and a high income to invest in commercial real estate, but it's best if you have at least one of those things.  If not, you may still be able to invest if you have great contacts.  The real secret of 'No Money Down' is that it means none of YOUR money down.

Here are just a few techniques used by creative investors to purchase commercial real estate right here in Reading, PA:

  1. Seller Financing (Both senior and subordinate positions)
  2. Lease Options/Lease Purchases
  3. Land Contracts/Installment Sales
  4. Trading or Exchanging
  5. Blanket Mortgages
  6. Mezzanine Financing
  7. Partners (Money or Land)
  8. Pledged Collateral
  9. Self-Directed IRA's

I'll be sure to explain each of these techniques in future posts.  In the mean time, give me a call if you are interested in purchasing commercial real estate in Reading, PA with creative financing techniques.  What creative financing techniques have you used?


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Tommy Taylor
Taylor Properties & - Kerrville, TX
CNE- Texas Hill Country Realtor

All types of creative financing, just as all other types of financing, are tools for the buyer and sometimes even the seller. Like all tools, each have a specific use and a time to be used. It is our jobs as professionals in the real estate industry to help our clients use the correct "tool'' at the right time.

Jan 12, 2011 11:37 AM #1
Carlos A. Fernandez
WEM Pacific Investments Co. - Daly City, CA
Bernal Buzz/Bernal State of Mind

great positive article,,,creativity and motivation are the keys to making any dream a reality, let alone buying a home in todays tighter lending guidelines ..not everyone can buy a home the traditional way, its takes creativity and hard work to get it done ...but if someone wants it that bad, then they can make it happen ...the nay sayers or bad talkers..just want the easy clients the ones that want that expensive home...have 25% down,,,great credit score,,and an easy close and check ...not all clients have it that easy ....they come in all different situations and ability to buy ..its up to you to stick it out with them and get it done ...for them !!!!

Jan 12, 2011 11:38 AM #2
Joseph Cacciapaglia
BMC Capital - Houston, TX

Tommy, that is a fantastic point.  I wish I had put it so clearly.

Carlos, thank you for the comment.  I couldn't agree more.

Jan 12, 2011 11:42 AM #3
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