Ten Creative Financing Techniques

Do all the creative financing techniques you hear about really work? Yes, actually. They probably have all worked somewhere for someone at least once. The point isn't if they will all work for you. The point is to know what is possible, so you can find your own creative ways to invest in real estate. Here are ten methods to get you thinking.

1. Hard money lenders. You can ask around or find these online. They specialize in short-term loans at high interest. You typically use this type of financing for a "fix and flip." You can often get the money fast, and if you make $30,000 on a project, who cares if you paid $10,000 interest in six months.

2. No-doc and low-doc loans. No (or low) documentation of your income or credit required. Again, you can find banks that do these online now. The catch is that you will only be able to borrow up to 80% of the purchase price or property value. If you have 10% in cash, you might be able to borrow the other 10% from a friend or the seller.

3. Seller-carried second mortgages. Sometimes a bank will loan you 90%, and allow the seller to take back a second mortgage from you for 5%, leaving you needing only 5% for a downpayment.

4. Land contract. Called "contract for sale" or other names as well, this just means the seller lets you make payments, and delivers the title upon payment in full. I sold a rental this way for $1,000 down, because I wanted the 9% interest, and the higher price I got this way.

5. Credit cards. If a seller will take $10,000 down on a fixer-upper that you expect to make $20,000 on, why not use credit cards? This is a true 0-down deal for you, and if you turn the project in six months, you will have paid $900 in interest on an 18% credit card. Don't let $900 get in the way of making $20,000.

6. Retirement accounts. The laws get pretty complex in this area, but you can check with a tax attorney to see how you might borrow from your own retirement account to finance real estate investments.

7. Friends and family. Keep it all business, if you use this source, but loaning you money at 7% isn't a gift if their money is getting 2% in the bank.

8. Note buyers. The seller needs cash. He raises the price, and sells to you for $100,000 with no money down, taking back two mortgages from you for $90,000 and $10,000. He arranged (or you did) for a note buyer to pay him $80,000 cash for the first mortgage at closing, getting him the cash he wanted. You pay two payments now, one to each note holder.

9. Get a loan on other property. Interestingly, if you take out a home equity loan for a vacation, and then forget to use it for that, you can use it for the downpayment on an investment property, without violating the rules of the bank that gives you the primary mortgage. In other words, you got in with no cash of your own.

10. Partnerships. For bigger projects, you could arrange for five investors to each put money into a partnership, with your share being the management responsibility instead of cash.

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

MORE RESOURCES:

Real estate bust: Toledo wins at Big House - San Francisco Chronicle

Great Food, Good Drinks and Luxury Real Estate on Main Street - Eastside Business Journal

BIZ DATA: Boulder real estate foreclosures - Daily Camera

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/2-0fd=Rurl=http://www.dailycamera.com/news/2008/oct/12/Boulder-real-estate-foreclosures/cid=1257047711ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNElwfZA2CzQf3pi1LlLFuCg1TjhnQBIZ DATA: Boulder breal estate/b foreclosures/abrfont size=-1font color=#6f6f6fDaily Camera,nbsp;COnbsp;-/font nobr1 hour ago/nobr/fontbrfont size=-1b.../b Boulder; Aurora Loan Services LLC; $1519142.90; $704000 334 E. Eighth Ave., Longmont; Front Range bReal Estate/b Partners LLC; $227838.20; $90500. b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/2-1fd=Rurl=http://www.dailycamera.com/news/2008/oct/12/Boulder-Broomfield-county-business-calendar/cid=1257047711ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNFFqkNslVPgnYGQdGpZg2fq74yiyQBoulder, Broomfield county business calendar/a font size=-1 color=#6f6f6fnobrDaily Camera/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1257047711hl=ennobrall 2 news articles/nobr/a/font/div/font/td/tr/table

Real estate growth strategies in focus - Gulf Daily News

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/3i-0fd=Rurl=http://www.ameinfo.com/171116.htmlcid=1257033209ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNFzY9mMjDpwzeIO-Shz3e85p8vgJQimg src=http://news.google.com/news?imgefp=OVxW3Ww3hKMJimgurl=www.ameinfo.com/images/news/0/64970-1111111111111.jpg width=55 height=80 alt= border=1brfont size=-2AME Info/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/3-0fd=Rurl=http://www.gulf-daily-news.com/Story.asp%3FArticle%3D231633%26Sn%3DBNEW%26IssueID%3D31207cid=1257033209ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNEyPaRFwrGdw11txhJbSe_Um1KFlAbReal estate/b growth strategies in focus/abrfont size=-1font color=#6f6f6fGulf Daily News,nbsp;Bahrainnbsp;-/font nobr2 hours ago/nobr/fontbrfont size=-1GROWTH strategies for the breal estate/b sector amid the global economic downturn will be discussed at a major conference in Bahrain next month. b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/3-1fd=Rurl=http://www.ameinfo.com/171116.htmlcid=1257033209ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNFzY9mMjDpwzeIO-Shz3e85p8vgJQStephen Lee is coming to Bahrain/a font size=-1 color=#6f6f6fnobrAME Info/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1257033209hl=ennobrall 2 news articles/nobr/a/font/div/font/td/tr/table

Making fortunes from real estate investment - The Punch

Bushnell looks at life and real estate in the Village - eTaiwan News

Hypo Real Estate Denies Report It Withheld Data on Liquidity - Bloomberg

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Real-estate agents, mortgage brokers hurting - Bolingbrook Sun

Real estate in Acadiana and Wall Street - The Daily Advertiser

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/8i-0fd=Rurl=http://online.wsj.com/article/SB122351316270117559.html%3Fmod%3Dgooglenews_wsjcid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNHHf1EdQcqkbCaC6zeB1KHAP0ZIDQimg src=http://news.google.com/news?imgefp=50jUWnAPCS4Jimgurl=s.wsj.net/public/resources/images/NA-AT054_McHous_D_20081008190940.jpg width=80 height=53 alt= border=1brfont size=-2Wall Street Journal/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/8-0fd=Rurl=http://www.theadvertiser.com/apps/pbcs.dll/article%3FAID%3D/20081012/BUSINESS/810120335/1046cid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNFwZkrTrch3tErdxvu5in-Ew33azQbReal estate/b in Acadiana and Wall Street/abrfont size=-1font color=#6f6f6fThe Daily Advertiser,nbsp;LAnbsp;-/font nobr18 hours ago/nobr/fontbrfont size=-1Fortunately, the Acadiana breal estate/b market is still strong because we did not have the speculation that was seen in other parts of the country. b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/8-1fd=Rurl=http://www.youtube.com/watch%3Fv%3DBAdIBCGcEo8cid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNFoMYOej_PB9jLEZoC7jI_SsfF0bwVideo: Obama: #39;Taxpayers Shouldn#39;t Pick Up Tab#39;/a font size=-1 color=#6f6f6fnobrAssociatedPress/nobr/fontobject width=448 height=356param name=movie value=http://www.youtube.com/v/BAdIBCGcEo8/paramparam name=wmode value=transparent/paramembed src=http://www.youtube.com/v/BAdIBCGcEo8type=application/x-shockwave-flashwmode=transparentwidth=448height=356/embed/objectbr/fontfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/8-2fd=Rurl=http://online.wsj.com/article/SB122351316270117559.html%3Fmod%3Dgooglenews_wsjcid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNHHf1EdQcqkbCaC6zeB1KHAP0ZIDQMcCain Reshuffles Rescue Deal/a font size=-1 color=#6f6f6fnobrWall Street Journal/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/8-3fd=Rurl=http://www.clusterstock.com/2008/10/mccain-s-messy-mortgage-buyout-digging-holes-and-filling-them-incid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNHkSigvSQNwJQzZwbXET2hPBw6XRAMcCain#39;s Messy Mortgage Buyout: Digging Holes and Filling Them In/a font size=-1 color=#6f6f6fnobrClusterstock/nobr/font/fontbrfont size=-1 class=pa href=http://news.google.com/news/url?sa=Tct=us/8-4fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3DacLuJmJz0roc%26refer%3Dhomecid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNGpISTCpEaqUX2ibgWIYNhlLQ1sYgnobrBloomberg/nobr/anbsp;- a href=http://news.google.com/news/url?sa=Tct=us/8-5fd=Rurl=http://www.stjoenews.net/news/2008/oct/12/troubled-home-loans-didnt-require-insurance/%3Fbusinesscid=1255319735ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNFXSkOlPBtaaQzR3hnIZ17KyWbQuAnobrSt. Joseph News-Press/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1255319735hl=ennobrall 1,086 news articles/nobr/a/font/div/font/td/tr/table

Sunday Real Estate Round-Up, 10/12/08 - Luxist

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/9-0fd=Rurl=http://www.luxist.com/2008/10/12/sunday-real-estate-round-up-10-12-08/cid=1256615524ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNGCLP-rqnVHmqmggaawGKLymuRt3ASunday bReal Estate/b Round-Up, 10/12/08/abrfont size=-1font color=#6f6f6fLuxist,nbsp;CAnbsp;-/font nobr13 hours ago/nobr/fontbrfont size=-1--More Ben Affleck and Jennifer Garner breal estate/b rumors, this time it is said that they have put their home in Brentwood on the market for around $8 b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-1fd=Rurl=http://www.dailyherald.com/story/%3Fid%3D241072cid=1256615524ei=fbPySP_VJILUyQS4kbzEBwusg=AFQjCNH9O57ojsL75-3UEGwgPsB72WjG1QDC, estate listed for $49 million/a font size=-1 color=#6f6f6fnobrChicago Daily Herald/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1256615524hl=ennobrall 3 news articles/nobr/a/font/div/font/td/tr/table

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