• Pace Morby

How Does Creative Financing Work and Where Can I Use It?

No matter who you are or how much money you have, I don’t know anyone who wants to spend more money than they have to get what they want.


If you’re shopping for a car, are you going to happily pay thousands of dollars over the manufacturer’s asking price to get the car you’re looking for?


Do you want to give an extra hundred dollars to the grocery store just for fun when you’re shopping?


No!


Even the richest men in the world who have lots of money to spend aren’t going to pay more for what they need. That’s not how smart business works.


Now, imagine these same scenarios for used products. You expect things that are used to cost less.


When it comes to buying real estate, homes are your products.


Unless you’re building your home from scratch, almost every home you’re in is going to be a used product. Even though homes can be a hot commodity, are you going to pay the new cost for something used?


No!


People get so caught up in what’s new to them, they think they have to pay the cost of new for what’s used.


In the real estate market that means getting a loan from a bank and paying the beautiful interest rates to get into a used building.


So fun.


Now the thing is, there’s a better way to get the same thing you want that doesn’t involve crazy interest rates, credit checks or ridiculous loans.


It’s getting what you want, when you want it, but paying over time without also pay interest.





This is what creative financing is all about.


When sellers are weighing their options of the best way to get the most money for their property, it may seem like a good short-term option to take a lump sum up front from a buyer.


The buyer usually gets that money from a bank, and then ends up paying tens of thousands more to banks for borrowing money.


In the end, most sellers also have to compromise on the price of their home to get it to sell.


That’s not a bargain for anyone! Everybody ends up losing money.


When I use creative financing, I let homeowners get their asking price, without haggling if it matches the market. The only compromise they have to make is that they act as my bank.


I won't borrow money from an institution and let the bank make extra off of that loan – I give that money to the seller instead.


In most of my creative financing deals, I avoid interest by making a large payment to the seller for the first year or two after taking over their property.


Doing it that way, I’m making installments one the overall price, the interest and the down payment.


This benefits sellers because they make the amount they were hoping for and even more because they benefit from this form of “interest.” This benefits me because I’m not spending all the money I’ve never owned on my investments.


That’s creative financing.


I use these techniques on bigger projects, but you can use them anywhere you have a willing seller. You’re working together in a partnership that benefits everybody.


I’ve used creative financing on trailers, trucks, houses and entire apartment complexes. The people in the SubTo community learn the many different ways to do this and put cash in their pockets every day.


You can learn how, too, and I’ll show you how.