Creative Financing

[Chris Pelletier]

Just curious how many of you use creative financing techniques? My wife and I are "newbies" and are looking to purchase our 1st home that can provide positive cash flow. We would like to put no $$$ down. What are our options? We have about 11k in cash but would like to keep that so we can cover any unexpected costs that come our way. Being new to the business we are expecting this will be an issue. If you have any advice for us we would greatly appreciate it.

Thanks!!

[Lou Castillo]

Almost that simple. The thing to remember in either scenario is that the lender has the right to call the entire loan due when title has been transferred. They have the right - not the obligation to do so. They'll only do it if it makes financial sense. If the lender is a real estate investor it makes sense to call the loan due. If it is a bank, then it doesn't. I have done dozens of subject to deals and the lender has never called theloan due. It is not in their best interest.

The seller has a lien on the house with a wrap mortgage which they do not with subject to. As an investor, I would rather have the seller out of the picture, so I always just offer ST. If you have a savvy seller who is very worried and you can not sell around it, then you could offer them a wrap. But I have never had to do that with a motivated seller.

If you do a ST deal, make sure that you have a good Disclosure letter to protect your assets. PM me and I will be happy to send you one if you're interested.