There's only one thing I'm paying attention to when it comes to the recession. The rest I could care less about.
There’s been a lot of back and forth over whether we can all agree if we’re truly in a recession or not. The thing that really matters is not whether we are “technically” in a recession or not.
The technicalities don't really matter to real people like you and me. What really matters is how it's affecting people's lives.
People losing their jobs, people struggling to put food on the table, People worried about how they're going to make ends meet, that's what a recession is to me.
And I'll tell you, that's what's happening right now. People are worried, and they're holding onto their money. They're spending less, and that's hurting businesses and people's livelihoods.
But here's the thing, there's always an opportunity in a downturn. And for real estate investors like me, that opportunity is creative financing.
Creative financing is like bartering or trading
You see, creative financing is like bartering. Instead of just trading cash for a property, you're using other forms of currency, like sweat equity, or seller financing. And the best part is, everyone makes more money in the end.
For example, say you're a seller and you're looking to move on from your property. You're not getting the offers you want, and you're stuck.
Instead of just accepting the lowest offer just to get out of the property, you could offer seller financing to buyers. You can raise your price to even more than people are willing to pay up front, but even with a higher price, it’s more affordable to your buyers.
This way, the buyer gets the property they want, and you get a steady stream of income from the payments on a much higher offer. And if the buyer defaults, you still own the property.
And for the buyer, they get a property they couldn't have otherwise afforded, and they have the opportunity to build equity and credit. And if they do default, they still have a roof over their head.
Where can I use creative financing in a recession?
Real estate is just one place where you can use creative financing, but the possibilities are really endless.
There are so many different ways to use creative financing to make a steady stream of income. In fact, I just sold an F150 to someone well over my asking price on seller financing and they’re happy to pay it to rent out the car on Turo.
They make money and I make money and someone gets to drive a nice car.
In a "worried economy" like what we’re currently in, it's more important than ever to explore all your buying and selling options.
Now, let's talk about how using creative financing in real estate now in a "worried economy" can lead to serious wealth and money security for your family in the future.
When the economy is down, property values are lower. This means you can get a great deal on a property that will appreciate in value over time. And with the right financing, you can turn that property into a cash-flowing machine.
For example, let's say you find a property for $100,000. But instead of just buying it outright, you use seller financing and only put down $20,000. Now, you're collecting $1,000 a month in rent, and you're paying the seller $800 a month in mortgage payments. That's $200 a month in cash flow. And as the property appreciates in value, you're building equity and wealth.
Now imagine you do cash flow of $200 on 20 houses a month; could that change your life?
And this is just one example. There are so many different ways to use creative financing to make money in real estate. And in a "worried economy" like this, it's more important than ever to explore all your options.
But the bottom line is this, people are worried, and they're holding onto their money. If you used creative financing, you could turn worry into opportunity. And by building wealth and money security for your family, you can weather any recession.
So, don't be afraid to be creative, and don't be afraid to take advantage of the opportunities that a downturn can bring. Because in the end, it's not the economists or the government that will determine your financial future; it’s only you.