What's your MOST Creative Finance Story?

[Mindy Jensen]

I want to know the most creative way you've ever financed a real estate purchase.

Mortgage? Pish, I've done that.

You sold plasma? Tell me more.

Seller Financing? I'm all ears!

Brandon Turner told us in  How We Bought a 24-Unit Apartment Building for (Almost) No Money Down the story of seller financing mixed with HELOCs and Partnerships. That's awesome, but I want to know how YOU did it!

I'm going to wrap the best of these stories into a book about Creative Financing. I'd love to include your story! Bonus points for before/after pictures, too!

[Tim G.]

I bought a house for $30,000 in San Diego County using creative financing this summer (2017)

Quick Financials

Purchase - $286,000 ($30,000 cash to take over mortgage subject to)

Mortgage - VA Loan @ 4.25% on year 3 of 30

Mortgage Balance - $255,XXX

Repairs - $10,000

Total cash invested - $41,000

Current Value - $390,000 ($100k equity picked up)

Payment - $1752

Rented - $2250

Here’s the Story…

The lead hit via my website, the seller wanted out of his property, I hadn’t taken the lead seriously in February. I remember telling the seller to have an agent list the place as it sounded really nice. He called me back in May, telling me he was ready to accept the offer I’d given over the phone. This is what I call a "hot lead".

Personally, I had been having what I’d like to call a “growth year” and this particular day was a very emotional days for me personally. I chose to meet the seller regardless, I actually remember crying in my car during the drive and coaching myself. Looking back it’s a moment I’m very proud of, and I believe this deal is the fruits of my labors in working on myself and my relationships.

When I sat down with the seller, I realized he was ready. There was no need to pitch, he expected a contract and that’s it. Suddenly I had the desire to see if I could buy the house subject to. I knew he only had around $30k in equity, I could afford that. What if I just took over the loan? So I proposed it, he agreed within seconds. It was wild.

The home had a rodent infestation and was in poor shape for a rental. I took over the house with almost all its belongings (including two sweet bikes I took to burning man).

I then invested $10k into repairs to make the place rental ready, which involved keeping a garage that had been converted to a master bedroom. My goal being to collect a higher rent with more rooms. Which worked, I pushed my 2/1 which would collect $1800 a month into a budget 3/2 collecting $2250 a month.

The main reason I kept this deal was that the house was just the biggest turd on the nicest street. Its a 2/1 875 sq ft home with a huge lot. All the other homes in the area are 3/2's in the 1300 sq ft range. My plan being one day to do a master suite ad on to the house, then 1031 exchange the proceeds into multi units out of state. I should have around $150k liquid from this deal at that point, putting me in a great position for a down payment on a larger multi-unit. 

This was the most amazing deal I've ever taken down, it was so easy. I was so humbled to realize that I was the only barrier in my way of making this deal happen. After coaching myself in the moment I took what was going to be a simple flip at best and turned it into my second rental property with a massive amount of equity.

And on a personal note, the issues that were causing me so much distress that day have been worked out in a wonderful way. I am really proud of my growth this year.