Building a RE Business Around Creative Financing for Investors

[John H]

What's the best way to form a niche around closing deals with more investor emphasis, i.e., getting buyers/investors to close on deals with creative financing like wraps, lease options, etc.

I want to form my residential and commercial business by working with motivated sellers and investors through creative purchases. I want to be an in-depth expert at structuring these deals, finding these deals, and negotiating these deals.

One reason for this is that I am an investor myself, and it seems like a lot of agents don't get into the investor perspective too much.

Any ideas? The biggest challenges I see are in the networking in terms of finding the buyers and sellers.

[Rich Weese]

Not sure this is going to be a quick answer, but it will help you give you other ideas to consider in a tough lending environment.
MANY years ago , I was a licensed broker in CA and CO. There are multiple parties to every transaction- obviously a buyer and seller, but also a realtor (or 2) and a lender(or 2)!!
Example. property for 100K. Lender will make an ltv of ??? 10%, 20% or 25%.
Seller needs to net ???
Buyer has ??? for down and costs.
If it was up to those 2, most deals would get done. However, when you add the realtor, it gets more difficult.
100,000 property. Buyer has 10% down, but lender will only make an 80% loan. Deal is 10K short of going together. Would the lender consider a 10/10? 10% down and seller takes a 10% 2nd? Many times , the answer was yes. Lender still is only doing an 80% loan so he is happy. Buyer spends his 10%, so he is happy. Seller gets almost all cash for his "net equity". He gets a 2nd mortgage for 10% at a certain rate and terms. The realtor agrees to take that as his commission.
This deal gets buyer, lender, and seller pretty happy. If the seller is unhappy about giving you a 10% commission instead of 6%, tell him it isn't cash, and you have to wait for your money. You can always bump the selling price a couple grand over what seller wants and that covers his difference on the commission from 6-10%. Buyer won't quibble over 10-15 dollars more on his monthly pmt. Hes' elated to get in at a lower down payment.
I did this many times. Where the BIG money comes in is on big deals. Apts are tough to get financed. If realtor is willing to take his commission in a note, it makes him a very desireable realtor to a lot more sellers. I had some complexes where it had been sold several times with new 2nds, 3rds or wraps going on. It helps a lot of deals happen. When I retired at age 29, I moved to central CA with 1.6 million in notes. This was when avg note carried a 10% rate. I was making 14K a month , just on interest before walking out the door each morning!! And, my principal was staying the same. When notes would pay off, I'd buy more.
There is a second part to this that was even more fun!! Go find a free and clear property where seller will carry the financing. Offer him several notes instead of him carrying a new note on his property. He is better off. The notes you give him are seasoned, more flexible because they're varying sizes and you end up with a free and clear property that you then go re-fi and the circle starts all over again!!
Ain't real estate amazing?? This can and has been done. I also used to buy notes at a discount, and then trade them for free and clear properties at FULL face value. That also helps with enormous returns.
I hope this answers the questions from Harrison and Mr. Investor. Any other thoughts, just chime in. Rich.