Doing more deals! Where can I learn about creative financing?

Question

Hello BP! I'm a wholesaler out of Atlanta. I've done roughly about 20 deals since my start in the business. I want to learn how to take advantage of more opportunities in my own backyard. I know how to wholesale. The concept is simple and I feel I've done enough deals to say I have a good grasp on the concept and know how.

I now want to learn how to structure different types of deals where wholesaling won't work. Is there a forum I can go and read? I listen to BP Podcast almost religiously. I'm in my car 4-6 hours a day during the week. Is there an episode I may have missed?

In the book Rich Dad Poor Dad Robert explains how opportunities are staring us in our faces everyday. A lot of us don't recognize them as opportunities because we aren't well versed in how to go about taking advantage of them. I don't want to continue to let opportunities pass by.

How have some of you extended your knowledge on how to structure more deals and ultimately get more done? I like to read. Are there any books you would recommend? Also are there any Podcast? YouTube videos? Websites? Etc.

Bill Gulley · Answer

I'm giggling..... :)

I keep thinking of creative financing as the creative use of assets to leverage the acquisition of another asset or to obtain some other financial benefit. Like buying a property or lowering your cost of capital, you know "financing" stuff.

I also keep thinking that "creative" means different than the norm, something unique, something different, something that can be employed with a higher level of understanding and skill.

Slurp! I'm having coffee....

I keep forgetting that on BP, "creative financing" means using 50+ year old strategies, or asking where the seeds are to a money tree.

So, you're just going to call up Fred off Facebook and see if he wouldn't mind writing a check and giving you a 30 year loan!

Two things about being creative. 1. you need a good basic knowledge of real estate and recognize different opportunities while understanding conventional financing; and 2., understand the basic concepts of the factors of production in economics....that would be "land, labor, capital and entrepreneurship"!

We can't get close to creative financing on BP because very few have mastered any basic knowledge.

Don't know about all the really smart folks who skipped ahead in school, we didn't do that when I was growing up. Can you believe it, they made me go the the first grade before I got to go to the second grade! Heck, I already knew my colors and how to read my two and three letter words! I even knew a couple four letter words!

And that went on through high school, I had to pass the 11th grade before I got to the 12th grade!

But then, by the time we get out of the 12th grade, we know everything don't we :)

By then, we get out of learning stuff and go directly to blazing through the world with blinding determination and our vast knowledge of how the things work.

All we need to do is get on BP, read strategies, podcasts and that should do it. Ask a few questions in the forms, and just go knock'em dead in the business world.

Regardless, if things work or not, in a few weeks of your unstructured learning process, you're ready to get creative.

Then fail, lose money, get arrested or let the family divorce you.

My suggestion, as usual, learn real estate before attempting do deal in real estate, then learn financing before trying to get creative in financing. If you don't know what is in the box, you sure can't think outside of it! :)

Slurp, slurp.

Brian Watkins · Answer

@Bill Gulley through the coffee breath and sarcasm.... :) I hear you loud and clear. I need to learn more about financing in its relation to Real Estate. Once I grasp the different traditional forms of financing then and only then can I become creative without worrying about going to jail, getting a divorce, or those other horrible things you mentioned. :) Thanks for the brute honesty. It's always served better that way even though it may take longer to digest.

David Fritch · Answer

Brian,  I buy and sell raw land. Since sellers own it outright and banks are not involved over 90% of the time it is quite different than homes. If I'm not paying cash, I'm buying on seller financing or finding a money partner.

With the creative acquisition strategies Brian Gibbons is the guy to listen to. Watch the video on his profile page for a sampling.

David Fritch · Answer

Hi Brian,

Have you checked out Brandon Turner's "The Book on Real Estate Investing with No and Low Money Down"? I got a lot out of reading it.

In my mind the answer for creative financing is not so much about deal structure as it is about network and relationships.

1.First define what you want to do and how much money it would take. Be thorough and think about all the hidden costs. Assume that things will take longer and cost more than the ideal.

2. Work your power base. You probably know more people with money than you realize. If you just go through your contacts (Facebook is really a good place for this) and think about who might have money to invest, think about their relatives  too. You'll come up with a prospect list. Define which ones you would prefer to work with based on your relationship and their character etc. You don't want the type of person that is going to be a worry wart or distrustful or make your life miserable in any way.

3. Contact these people or wait until you're around them. Then ask them. "Hey you know I've been crushing it doing strategy X and I see a lot of opportunities doing strategy Y and I was wondering if I find a deal that looks like such and such if you would be interested in partnering with me on it."  Then show them the sample deal that you worked up and the breakdown of deals you have down (for credibility)  and see if they are interested.

4. The other thing that you can do is network in your local REIA and here on BP. There are people on here that lend money and do joint ventures. Get in the marketplace and read up on what people are talking about in there.

Hope this is helpful!

Dave Fritch

Ned Carey · Answer

@Brian Watkins My niche is tax lien investing. We buy so many that we are able to foreclose on a decent amount which becomes out funnel for wholesale deals. every now and then we keep a cherry for our rental portfolio.

David Fritch · Answer

I think Mr. Gulley has some excellent points about building your overall fundamental knowledge step by step in a progressive program. I shared with you my perspective on financing my flips of rural and recreational land, a niche that is very different from most other real estate business models without bothering to ask what it was you are trying to achieve.

Brian Watkins · Answer

@David Fritch I have not read Brandon's book yet however I will put it in Queue. I agree that relationships are the foundation of any deal. Thanks for the solid information. I am already engaged in a few of those activities however I will take heed to the other suggestions. What niche are you in?

@Ned Carey Thanks for responding. I will head over to that forum and start binge reading. What niche in the industry have you chosen or what do you find works well in your market or works well for you?

@Brian Gibbons Thanks for the response. I appreciate the specific terms you mentioned. I wirite them down and will be researching and learning about each. Seems like a great place to start. What niche have you chosen? Is there anything you find working extremely well for yourself (that you wish to share) when it comes to finding motivated sellers?

Brian Gibbons · Answer

You're in Georgia A wonderful state for creative financing and should look at cash or terms offers to sellers

Sub2, land contracts, notes, lease options

Pm me

Ned Carey · Answer

@Brian Watkins  You can see the complete list of forums under the forum tab-forum categories. There is one on creative strategies.

Doing more deals! Where can I learn about creative financing?

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