Creative Financing - What is it? Does it work? Formulas --

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Creative finance and creative negotiating is about the same thing.  

There are many definitions for the so called creative stuff, so what it is? In my opinion, it is a buyer attempting to put together a transaction that is going to benefit himself, while trying to get an agreement from the seller to go alone with the purposed offer. 

Some times an investor is compelled to think way out side the (so called) box, to be able to reach real deep in order to put together a deal that makes sense. Many times the investors is working with little or no money or ability to get a loan......but he is motivated to make a deal work and make money.

Here are a creative idea that may work for you............

Control and Roll:  Control a property with a delayed settlement with the right of possession and contingent on assignment. What this means is that the investor is offering an amount that he feels he can assign his contract for more, while having the right to occupy the property, improve it, market it by MLS, World Wide Web, mailings, signs on the property or newspaper ads or by public auction.

Once a contract is ratified by all parties, the buyer is considered to have an equity position in the property.

Here are some clauses that should be in the offer; "It is understood that the buyer is making this offer with the intent to make a profit by short term assignment, the buyer will have the right to improve the property and to advertise it for sale." 

Once the property is "Controlled" with a long form or a skinny contract or a hybrid contract, the investor's job is to find an someone he can assign his contract to......for all cash and in "as is" condition. (If there is a hole in the roof, the buyer gets the hole and the roof.)

You may want to consider a public auction (with a reserve) ..........so.....if you are in for $150,000 and the assignee takes it off your hands for $160,000 (hopefully more), at settlement, your name is on the HUD-1 to collect a $10,000 assignment fee.

This system is known as selling real estate you don't own!  Think about it, you cant get any better leverage.

Charles