A Mother's Love, College Tuition, & Creative Financing

A Mother's Love of her child is a force that words cannot fully convey its intensity. However, a situation I was privy to afforded me the truly rare opportunity to see this love in action. It is said that "there is nothing a mother will not do, for the benefit of her child." And, when push comes to shove, the posture a mother will take to protect her child is absolutely formidable.

College Tuition costs concern many Americans. And, rightfully so, with an average costs of $26,149 per year (not including room & board). With 4-year public colleges averaging a costs of $22,203 and 4-year private college averaging $30,095. To provide a little context on these yearly costs, the median American household income is $60,309, one-third to one-half of a typical household's income, depending on the type of college.

The back story, as you might have already concluded, involves her son's ability to continue his post-secondary education. Gee, the son's name for this article, had completed his first year as an accounting major at a private 4-year college in New England. Because of the high costs of his first year, Gee still had a debit balance with the institution and his tennis scholarship could not make up the difference. So, Gee was not able to start his second year.Gee spoke with me over the summer break for suggestions on how to address this issue with the school. I provided him with as much insight and as many strategies as I could that I thought might work. However, to no avail, Gee had to sit out the first and second terms of his sophomore year (this institution currently still uses a quarterly system not semesters). Gee's mother was so distort over this situation, she started seeking affordable ways to ensure her child's educational journey.

Creative Financing to the rescue. Gee's mom purchased a 2-family residence in Milton, MA back in 2009. She house hacked the acquisition and to this day it is still an owner occupied residence. So, at this point many might think Gee's mom obtained an equity loan of some type. Well, you would be wrong... so keep reading... Gee's mom could not pursue a conventional loan because of the variability of her yearly income.

Gee's mom found a Real Estate Investor that was active in the market where her property is and negotiated the following deal:

• Investor purchased the house @ a discount
• The discount will be equal to 18-months of rent
  • Gee's mom will be able to stay in the property for those 18-months rent free, so her daughter can finish high school (it a good public high school).
• After closing, Gee's mom will have approximately $150,000, which she intends to use on the acquisition of cash flowing properties.

Creative Financing is a skill Real Estate Investors MUST develop, to win deals that might have others wise been discarded or lost. The creative solution this mother crafted is ABSOLUTELY BRILLIANT!  And, I hope you see what see did and how she did it. This method will not work for all seller and/or investors. However, it is another tool in the Real Estate Investor's belt.

In closing - I told Gee's mom to visit BiggerPockets.com to learn more about investing in properties and methods to do so. Given the move she was able to execute, I believe she will have a GREAT future investing in real estate.