Creative finance END GAME???

[Frank Oliva]

Hi all

I have been consuming lots of information about creative financing watching BP podcasts and Pace Morby especially.  

I feel like I have a decent grasp of the front side of the concept.  Finding property, speaking with seller, crafting a creative finance deal that benefits both parties. 

BUT, once the deal is put into place and there is a balloon payment due, what is the best solution to paying off that large lump sum?  Is the idea to cash out refinance and pay the seller off?  Now you own the deed AND mortgage on the property?  What if there isn't enough equity in the property to successfully complete the transaction?  

Are there any other ways to pay the balloon payment once it is time?  I feel like i am missing this piece of the puzzle and that is stopping me from being confident in moving forward with attempting a creative finance deal.

Any help is greatly appreciated!

Thanks!

Frank

[James Hamling]

Quote from @Frank Oliva:

I appreciate the views and detailed explanations.  Can someone give me a breakdown of a creative/seller finance?  Sale, terms, payments, balloon (?), equity, full ownership (deed in hand AND original seller paid off) 

Or am I completely off in how I understand how this works?

Looking for someone to explain like I'm 5!

Thanks

 Ok Frank. 

Let's start with the problem is your perceiving everything wrong. So, forget literally everything you think about Real Estate. 

Deed's don't matter, none of all that matters. 1 thing and 1 thing ONLY matters; CONTROL. 

The foundational comprehension one needs coming into creative financing deals is you don't care about all the other garbage, your focus is how do I gain CONTROL of the property, to empower my MONITIZATION of the property, at a PROFITABLE MARGIN, that is at a level which makes sense for the RISK EXPOSURE. 

That's it. 

Your problem is your looking for some singular cookie-cutter hard-fast A-B-C 1-2-3 step by step instructions like building a Lego project. It does not exist. Everything is dependent. There is multiple factors that one can adjust one factor to make another crappy one work. 

Someone wants 10% interest rate, ok, I can make that work, BUT they need to take maybe an interest only payment for say 10yrs. yeah, i don't "own" the property but so what, I have CONTROL and say those interest only payments are $1k mnth and I can monetize it for $3k mnth, I'm happy. 

Creative Financing deals are for PROBLEM SOLVERS, and those without that ability will fall-flat. You gotta use that neck-weight for some thought processing. That's how it works, you simple adjust the various factors until they work. 

The end game; WIN-WIN, that's it.    There is no universal assembly instructions.