Creative Finance - the key to financial freedom

Creative Finance - the key to financial freedom

When you talk to new investors, and some seasoned ones, you will hear time and time again that their goal is to be in a position to quit their w-2 job.  That is a wonderful goal and I think everyone should start there. 

We all know how to do this.  All you need to do is to create enough passive income to replace your w-2 income and you are out the door.  The concept is so simple. Anyone who has read Rich Dad, Poor Dad will have full command of the concept. 

Most people run into a road block on their way to this dream of freedom.  They either run out of down payment money or they hit the bank's glass ceiling.  Either one, can be a career ender.  The truth is that, no matter how much money you make at your job, you will eventually run out of down payment money.  That is a fact. Also a fact is that your friendly bank wont be so friendly once you reach the maximum amount of mortgages that they allow. This is generally either 4 or 10 mortgages.  Once you hit that threshold, you are done with bank financing. The bank wont care about your credit score.  The bank wont care about your income.  The bank wont care that you are a really good person. Strangely enough the bank wont care that you found a homerun of a deal. Banks suck. 

Now you have hit the roadblock but you still don't have enough monthly cash flow to tell your boss what you really think of him.  So what are you going to do?  One strategy is to join the BRRR crowd.  This method has a built in problem. To do it properly, you are pulling all of the equity out of your properties and piling up a mountain of debt.  What do you think happens to a BRRR empire when there is a market correction?  What happens when the bank wants their money and the tenants aren't paying?  You lose the entire empire.  I have seen experienced investors loose millions of dollars in equity by being highly leveraged during a market correction. Even if you don't lose the empire to a correcting, the BRRR method hits it's own glass ceiling when the bank wont let you REFI your properties anymore. This happens every time there is a tightening of the credit market. Unless you have a hotline to the Federal Reserve, you have no control over this. 

If you want a SAFE way of buying unlimited property, then you need to learn about creative finance. There is no limit to the number of properties that you can buy, other than the limit of quality deals that you can locate. I never run into a limit on the number of mortgages I am paying, in fact not a single mortgage is connected to my credit score.  The people at the credit reporting agency would have a stroke if they knew how many properties I have purchased. You don't need good credit to buy a property with creative finance. I honestly don't remember the last time anyone asked me what my credit score is, and I have a very good credit score. You don't need down payment money to do creative finance deals. I rarely give the seller any money, and when I do, it sure as heck doesn't have to be 20% of the purchase price.   Creative finance even insolates you against a market collapse. Imagine that the entire real estate market has just tanked.  As a creative finance buyer, you can go directly to your lenders (people who sold you houses) and negotiate new terms on the deal. Try doing that with a bank.  The bank might offer you a loan modification but there are a lot of booby traps built into loan mods.  If you can't make the payments with a bank, your credit and future ability to finance anything has just evaporated. That is not true in the world of creative finance. 

The reason that I am such a strong proponent of creative finance is that in all of my years as a real estate investor, I haven' seen anything better.  I know a lot of the big national gurus, that sell home study courses to the masses,  I can tell you that they all use creative finance in their personal business.  They might not teach it but they use it. 

Creative finance is the art of buying valuable real estate without money or credit. I can assure you that if you learn to buy with no money, you will never run out of "no money".   You can build any future that you like. 

Take your time on BP to learn as much as you can about this subject. Your future wallet will thank you. 

If you need a little help, or a lot of help, reach out to me. 

To your success

Josh 

PS, if you want to commit to learning, and you need a mentor, follow this link 

https://pittsburghreia.com/mentoring-info/