26 Creative Financing Techniques!

Hi everyone!...What is below is 26 proven techniques to get money for your deals!...Feel free to learn!...

1. Hard Money Loan -
Asset based
None/low qualifying
Similar to bridge loan in that they are short term.
High points, fees and rates
Usually 65-70% loan to value

2.Portfolio loan-
Loan made by smaller banks ie…Credit Unions/Comm. Banks
Does not sell into secondary market they keep in house
Conventional rules need not apply
Loans based on Income/Value of the property not your credit and income

3.Master Loan Commitment-
Negotiate a “Loan Commitment” like of credit with a portfolio lender
Rehabbing, flips and even long-term refi’s from hard or private money
Great for big rehabbers, developers and mortgage brokers

4. Stock Loan
Securities based loan
Loan up to 80% of the value of your free- trading stocks, bonds, mutual funds
Non-recourse
True No Doc- no credit, income or employment verification
$50k minimum

5. Blanket Loan
One loan that wraps up miltiple properties
Usually residential
Portfolio lenders
Some rules such as- must be in same state, city, county or contiguous

6. LLC Loan-
A loan originated in the name of your entity that does not report to your personal credit report
Must be personally guaranteed
Usually from portfolio lenders
A tactic to free up capacity for conventional loans

7. Self-Directed IRA
Allows you to invest in real estate using your IRA or 401K
Look for “checkbook control” such as Guidant Financial
Excellent for recruiting private money partners!

8. Non-recourse loan
Any loan that is not guaranteed personally by the borrower
The recourse is limited to the property only
Primarily found in big dollar commercial loans or in deals with very low loan to value
Special non recourse loan for SDIRA’s

9. Land Contract-
An agreement where the buyer makes installment payments under a purchase agreement

10. Lease Option-
Lease option is a lease and an option to buy the property - keep separate!
Sandwich lease option means you lease option a property from a seller and then re- lease it to a tenant buyer on a lease option
Title stays in sellers name
Can be executed or flipped for a fee!

11. Subject To-
You buy a property by taking over the existing financing
You can sell the subject-to as well!
Title transfers to buyer
There is even a line on the HUD1 settlement statement to show financing taken “subject to”

12. Master Lease Option-
Exactly like a sandwhich lease but on commercial income producing properties
You can increase the income to improve the value and cash out equity when you buy
You can execute or assign the option for cash
100% purchase financing!

13. Rehab Loan-
A construction loan for existing property
Loan usually based on the as repaired value or loan to cost
Initial purchase funded and the repair money is distributed via draws
Hard mony, bridge, or portfolio lenders

14. Transactional funding-
Very short term money typically used for double closing on residential or commercial property
24 hours to 95 days (!)
No qualifying- must have the B 2 C deal approved for 24 hour funding
Up to 95 day funding is equity participation

15. Private Money
Leveraging private individual to fund your deals
100% financing and no qualifying
You dictate the terms, rates, structure, etc…

16. Debt Partner
A private money partner that invest in your deal in exchange for a set return each month
No profit participation in cash flow or equity
A true private money lender
Rates as low as 5%

17. Equity Partner
A private money partner that invests in exchange for profit participation in cash flow and / or equity
The most expesive private money partner but the easiest to find
The splits are totally negotiable
don’t be greedy if you have no skin in the game

18. Credit Partner
A partner on residential deals only
Used to qualify for conventional loans
Credit partner is borrower and details fo the arrangement are spelled out in the joint venture agreement

19. Seller Carry back-
When the seller agrees to “Carry Back” a second mortgage on the property
Typically 15-25%
A strategy to use with bridge and portfolio lenders to get to 100% financing!

20. Wrap Mortgage-
One promissory note for the entire loan
Two mortgages secure the note
-1st (original) mortgage in sellers name
-2nd (new) mortgage that seller is carrying
Back
Buyer makes ONE Payment (PITI) to seller
Seller pays the first mortgage and pockets the proceeds on the second
Title transfers to buyer

21. Shared Appreciation Mortgage-
Seller agrees to a below market interest rate in exchange for a share of the appreciated value of the property
The share of the appreciated value is known as the “Contingent Interest” which is determined and due at the sale of the property

22. Performance Mortgage-
Mortgage that is recorded to secure a lease or purchase option
Its accomplished with a performance mortgage (or deed of trust)
If seller breaches his option agreement, you can foreclose

23. Fractionalized trust deed-
A private money loan where one mortgage or DOT is secured by up to 10 promissory notes
10 debt partners all in equal lien position

24. Syndication-
Pooling capital from multiple private money debt and/or equity partners to take ownership of real estate
Simple JV’s , Fractionalized trust deeds, LLC’s , Lp’s , PPM’s, REIT’S AND Hedge Funds
Rules of disclosure, offerings, and marketing from the SEC

25. Participation Loan-
1.A loan that is shared by a group of banks that join to make a loan too big for any one of them alone
2. Commercial “Conduit” lenders may offer high loan to value profit participation loans
Most common on larger commercial deals

26. Cross Collateralization-
Pledging the equity in one property as collateral for a loan on another
If you default on the subject property the lender can take the other property too.
Great way to get financing on “Overleveraged” properties