Buying Homes with $100 Down & Creative Finance Secrets Most Don't Know

Episode #794
Creative finance is a home-buying hack that most people don’t know about. If you know what it is and how to use it, you can pick up properties for only a hundred dollars, build your rental portfolio faster than ever, and reach financial freedom in mere years. And in 2023, when the housing market is still hot, and home prices have barely cooled off, creative finance could be the solution to no cash flow and overpriced deals. But before you creatively finance your next rental property, you’ll need to know which strategy to use and when to use it.
Jenn and Joe Delle Fave used creative finance to move from snowy Upstate New York to sunny Florida after escaping soul-crushing work. Jenn, a former teacher, loved her career, and the time she spent with her kids. But Joe was stuck at the car dealership, working late into the night, sacrificing family time to make more money. He knew he needed a way out but didn’t want to give up the financial security of a W2. Everything changed when he had the “light bulb” moment to try creative finance.
Now, Jenn and Joe have run a full-time investing business, picking up pristine properties using strategies like seller financing, subject to, or wrap mortgages. They’ve acquired properties for very little down in some of the most competitive neighborhoods in the country, growing wealth WITH the time freedom they desired. Jenn and Joe give invaluable advice on which strategies work for which seller, the easiest way to get leads sent to you, and how you build wealth with real estate faster.
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What Is Creative Financing And How To Use It In Real Estate:
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Show notes at: www.biggerpockets.com/blog/re...
00:00 Intro
03:58 Quick Tip
04:38 Live Where You Invest!
08:32 Invest Faster with "Wraps"
21:40 Finding Creative Finance
27:21 Working with Your Spouse
30:44 Escaping the "Golden Coffin"
39:20 Best Creative Financing Strategies
46:06 The EASIEST Way to Find Deals
59:04 Connect with Jenn and Joe!

[@joshuaterral9351]

I'm loving the longer form content! It makes it easier to sit down, and relax. It makes it easier focus on a specific topic instead of jumping from episode to episode. I can see a difference in the way I am able to understand new concepts between shorter videos and longer the ones.

[@creativefinanceplaybook]

Thank you ❤

[@Resto56]

This was finally a really good one and they actually sound and look honest about helping

[@creativefinanceplaybook]

Thank you for the kind words, we really appreciate that. 😊

[@notnilc20]

Wow! I've heard some really good biggerpockets episodes but this one has so many golden nuggets. These 2 need to write a book. They are great at explaining and going into detail their strategies. I need to listen to this one again just to make sure I got everything pat. Good job!

[@creativefinanceplaybook]

Wow! Thank you so much, we sincerely appreciate it ❤

[@NevadaNotaryServices]

This is very true about realtors replying right away. That is how I pick my realtor and loan officer. Who ever replies first and CONTINUES to reply to my follow-up questions gets my business. Sometimes, they will reply. BUT, when I text back my follow-up, questions. Silent. That shows me they just wanna jump in line by replying real quick. But, do not have follow thru.

[@creativefinanceplaybook]

That is absolutely correct. In this business communication is key and finding the right people to work with makes all of the difference.

[@_aspenjay]

This is pure gold! Thanks Jenn and Joe! Still don't fully understand all the details of creative financing but this definitely helped!

[@creativefinanceplaybook]

Thank you so much! It’s complicated in the beginning just like learning anything new, but once you do, it’s amazing

[@MyGarden-os6dd]

@@creativefinanceplaybook too complicated, too risky and, honestly, I do not see any advantage to the seller who is giving all their equity in the house to you for free and risking being in deep trouble should something happen and you are not able to keep paying their mortgage... anything "complicated" like this sounds like a scheme... everything can fall crushing down really quick when economy takes a little turn and you are not able to pay just one seller. There will be a domino effect and a lot of people will suffer from this risky undertaking...

[@creativefinanceplaybook]

@@MyGarden-os6ddthis isn’t a technique that we discovered, it’s been proven that it works for decades. When it’s too complicated or doesn’t work well typically comes from lack of knowledge on the topic, it’s actually pretty simple. 😊

[@kovideoos3612]

I’ve been in the car business for years and I can totally relate to this guy which is why I got into real estate and now taking it a step further to get my RE License.

[@creativefinanceplaybook]

Great choice! Buy enough real estate that I could leave the dealership was always my plan. 😊

[@greydenpiechnickrealestate6928]

JENN AND JOE ARE THE BEST! They Tought my mentors Mike and Jae , and that lead to me having 11 units and wholesaled 2 deals in the last 6 months!! Listen to these two and take action!! 💰 🏡

[@creativefinanceplaybook]

Thank you Greyden! You’re a Rockstar!!

[@bigdope9578]

Do they have a mentorship program?

[@jakesflippintrippin1140]

@creativefinanceplaybook

[@trinityriverfence9796]

Great episode!!!

[@creativefinanceplaybook]

Thank you!! 😊

[@collinbaptiste5619]

Jann and Joe, you guys are flipping geniuses 👏🏾 🙌 ❤️ 😍

[@creativefinanceplaybook]

Thank you 😊

[@rosadiaz-hw1cq]

Wow, great episode!!! Thank you David and Rob for always delivering great Real Estate experiences and information!

[@creativefinanceplaybook]

Thank you!😊

[@Zachdpate]

Great episode. I closed my most creative deal from Facebook marketplace! 12 unit deal where I also got paid to buy it due to how I structured it. Funny to see others having success from Facebook too. Creativity is key!

[@creativefinanceplaybook]

Wow Zach! That’s incredible, great job 👏

[@richardwhitmore8602]

Really enjoyed

[@creativefinanceplaybook]

Thank you!! 😊

[@jasonswartley1351]

Rochester, NY. I live in Geneva, NY and work in Rochester. We have STR’s in Geneva.

[@creativefinanceplaybook]

We love Geneva! One of our clients made a seller finance deal on a 12 unit apartment building in Geneva on her first deal! 🔥

[@dayinthelifeofRE]

Covid was also a huge benefit for us. It essentially forced me into a higher-paying job and that is when we did the Cash out refinance and started investing. Fast forward two and a half years later and we were on the rookie real estate podcast for purchasing 6 single-family in 1.5 years

[@saml8560]

Wrap’s are the way!!

[@creativefinanceplaybook]

Absolutely!!

[@patelbv]

This was an awesome video! Jen, thanks for the tip on the 5am club, I have been slacking lately. And Joe, thanks for sharing your tips on lead generation and scripts! Transparent and helpful

[@creativefinanceplaybook]

Thank you so much!

[@memsiegeorge4684]

🙌thank you

[@creativefinanceplaybook]

Thanks for being here!

[@kerrybaird739]

Awesome strategies!

[@creativefinanceplaybook]

Thank you!! 😊

[@jessemartinez11]

This was the video!!

[@frankellymartinez2770]

Wow great episode 👏 👌, love it 🙏

[@creativefinanceplaybook]

Thank you! We sincerely appreciate it! ❤

[@romi929]

Wow! This was GOLD!! I am really trying to purchase my first creative financing property and I am nervous. Thank you so much guys for this awesome information. I will definitely contact you for help❤️🙏🏻

[@creativefinanceplaybook]

Thank you so much!!! 😊

[@jennypennock]

Has the bonus deep dive posted yet? Just loved this episode and all they shared!!

[@creativefinanceplaybook]

We share a lot of the bonus deep dive on our KZbin channel 😊

[@creativefinanceplaybook]

Yes we did! It’s coming out July 3rd on the BP Rookie podcast.

[@9emaze]

So to my understanding, the seller can use that monthly payment of the property they sold subject to for the DTI up to 75% of the monthly payment after a year ? So for the example on 16:20 min mark. The monthly payment on the house was 1600. 75% of that is 1,200. The seller after a year can use that 1200 as income to help lower their DTI ratio ?? Even though in reality they’re not getting that 1600 cause it’s going to the bank who has the original loan on the property. If I explained that well.

[@creativefinanceplaybook]

Actually yes, you are stop on! Great job 👏

[@9emaze]

@@creativefinanceplaybook awesome did not know that. Thank you!

[@romi929]

@9emaze thank you for this explanation!!! I get it now 😃

[@chercha9441]

In your example, keep in my that your DTI is lowered but you still have a $400 hit against your DTI. So instead of $1,600 hit you improved it to only $400. Just wanted to make sure that was clear. Some people may read your example and think that you have a +$1,200 cash flow which is not the case. I’m sure you didn’t mean it like that but I can see how someone who is new can interpret it that way.

[@austonfoster7817]

This hit home… my wife stays home and I work at a dealership. We miss each other everyday, the more I make the less I see family. Hoping real-estate is my saving grace.

[@creativefinanceplaybook]

I feel for you, I worked for a dealership for 20 years, it’s a grind! But everything you do at a dealership translates well into real estate.

[@antoniostephano]

The use of the wrap is interesting. The seller signs a promissory note payable to the seller in the same amount as the existing note and with the same monthly payment but instead of making the payment the buyers pay the bank. This is different than Pace Morby's strategy where he hires a mortgage Servicer to make the payments on the existing mortgage to the bank. Both methods solve for seller the potential problem of excessive debt to income .

[@jjsupremeorta15]

Incorrect. Pace teaches that exact method too, he doesn't talk of it much. Most of his wraps are for your buyout amount at the end of the or for cashflow. My wraps are from subway 😋

[@karlhudson7491]

What is the benefit for the buyer besides having the deed to the property. Is there cash flow in this I’m not seeing?

[@kaleb4256]

yeah cashflow is the benefit of buying a property Subto and taking over their mortgage@@karlhudson7491

[@jz28h]

Cash flow if they agree upon interest on payments. Avoidance of tax hit on huge a lump of money. And often there isn’t any argument of price if the rate and terms can be negotiated. It’s a win for all. If you’re interacting with open minded individuals but that in itself is the rub. Most people ignorant of other possible paths won’t take them even after getting the explanation.. Mindset often cost people money. They rather listen to horror of what might go wrong than what might go right. 🧐

[@user-ct8ee8od6o]

So the seller doesn't get his equity money until the buyer sells again? I'm still confused why the seller would do this.

[@reaabeer1040]

This is an episode worth watching over and over ❤ Thanks for this episode.

[@creativefinanceplaybook]

Thank you!! we share more information about this topic here on our KZbin channel as well. Thank you for watching.

[@bryanhoffman659]

​@creativefinanceplaybook can you share the name of your coach? And/or do you do coaching?

[@RicksCafeAmericana]

Great episode and nice to see good people win! Thank you.

[@creativefinanceplaybook]

Thank you!!!😊

[@user-ct8ee8od6o]

How do you know they are good? Being successful at real estate doesn't make you a good person and you literally know nothing about them. 😂😂😂

[@Ace_blessed]

Why 7 llcs and is that per day or just during this week or month?

[@yourpersonalagent7243]

I’m so glad the wrap financing discussion was brought up. Subject To without that part of it still didn’t feel right. Now I want to get clarified how are they giving the seller’s “fair market value” and not lowballing as they noted at the very beginning if they’re only taking over the seller’s payment??

[@tylerrowley5583]

This is my big question as well. Seller owes $200k on a $300k house. Seller can’t make payments anymore and for some reason he can’t or doesn’t want to sell conventional. Seller agrees to Subject To w/ Wrap Mortgage. Am I buying that house for $200k or $300k?

[@apostlemarvinomede3961]

Another question I need answers on.. Is almost like subject 2. They way they just take it over…only with a promissory note. Let me say here that; this system of Wrap will not work for a Seller with Equity. No mention of that was made. So I guess is Subject 2 with paying the money directly to the bank 😊

[@dennisnewton9384]

What about repairs to get the house rent ready?

[@RealEstateTradr.Online]

Does that wrap option remove the due on sale clause because they are direct to the bank?

[@creativefinanceplaybook]

No it doesn’t. The due on clause is always there, however, if you set up insurance correctly and make payments on time, it’s most likely never an issue.

[@dennishowland7495]

I almost wanna say subject to or as she gives it a new name a mirror rep at a Bridge I’m almost thinking it’s a bridge loan but I find anything that complex of Selah beware or beware of subject to because I don’t necessarily think it’s a good fit original home I think if you can’t get a loan for your debt to reach me, then you need to rent your house out yourself and lower down and make it a business just like these people are making a business out of your house but I don’t know but good question in David Twin Coach Hill I like the information

[@TroikaMexicana]

The wrap is a creative finance offer for a buyer, but I'm confused why a seller would even want to deal with this. Just more complicated for them across the board, correct? How could I explain to a seller that all this hassle benefits them?

[@creativefinanceplaybook]

Those are great questions. When buying real estate we love buying with a wraps because we buy beautiful, turn key houses in beautiful neighborhoods. The sellers love it because this works when a low cash offer wouldn’t work, we can pay full price for the property. We buy it as is, we pay both sides of closing costs without any fees or commissions. In some situations, especially recently, some sellers have their house listed on the market with a realtor and it’s not selling, and the seller can’t drop the price any lower because they owe too much. So in those situations, we are able to help out the Seller, when a cash buyer can’t, and even listening it with a realtor is not working. We are finding a lot of these deals right now this way. I hope that helps! 😊

[@countrysister700]

Seller has property in poor condition, needs out from under the payment quickly, etc. His desperation makes having somebody else making the payment that even this weirdness makes his life easier

[@pyrochickhop8339]

​@@countrysister7001:01:52

[@ceestyles5714]

​@@creativefinanceplaybookmentorship programs?

[@papimimi5469]

Wow! David must be in shock after just being in Hawaii. Enjoying you guys with your personal and professional stories.

[@mattheweaton1420]

Great couple and great content in this episode!

[@creativefinanceplaybook]

Thank you Matthew!! 😊

[@mattheweaton1420]

@@creativefinanceplaybook You're welcome! I'm also from the 585 and working on escaping too.

[@creativefinanceplaybook]

@@mattheweaton1420Florida is beautiful this time of year 🌴😎

[@RJ4Loans]

That was a great episode. Thank you for sharing. I really enjoyed learning about your journey. I spent over 25 years in the car business so I totally understand your motivation for getting out. I missed way too much life.

[@creativefinanceplaybook]

Wow! 25 years in the car business is impressive. Good pay, a lot of hours and stress. I loved it for what it was, but I’m so glad I’m not in the dealership world anymore 😊

[@iceguy8112]

It'd be awesome to hear your know-how and knowledge about your story!

[@RJ4Loans]

@@creativefinanceplaybook I am the only guy I know who spent that much time in the industry and is still married to my original wife. Most eventually loose their families. You made a good move.

[@RJ4Loans]

@@iceguy8112 Thanks, after 25 years of being Sales Manager, Finance Manager, General Sales Manager, and Finance Director, I had worn all the hats, sat in all of the chairs, and have had enough. Long hours, no time off, dishonest owners who constantly changed my pay program and cheated me out of money I had earned. If I made too much money they would cut my pay program. If business slowed down, I would get replaced. They use you up and spit you out. I went into the Mortgage business just in time for the Mortgage meltdown. I survived and studied a minimum of an hour per day for the past 18 years and now am one of the most knowledgeable guys around on both Mortgage and Real Estate. I now do both Mortgage and Real Estate. Clients love having one person do it all. It is still a challenging market, but has unlimited opportunity and much more time freedom. I travel a lot and can work from anywhere in the world. I did a deal while sitting on the deck or our rental home in Italy while looking at Mt. Vesuvius.

[@thecaveman7360]

​@@RJ4LoansFantastic man. Would love to get in touch with you and why not have a chat? I want to be very successfull in REAL ESTATE

[@nataliameyer3633]

For me sounds an advance strategic to understand as a newbie. Is there a seminar or class that i can take to understand thiss kind of strategic? Thanks

[@almmason7]

Pace Morbys youtube page or these guys page. Pace has a Subto Mentorship...

[@ChicagoGringo]

Tampa is not “South Florida…” 😂😂 but great episode!

[@creativefinanceplaybook]

It feels southern to us 😊

[@detectivekimble6932]

In my experience has been I can get terms or a deal, rarely if ever both. I can't cashflow without a great deal here. So I'm probably not getting terms. I've thought about terms (wrap or lease option) and overpaying to buy several and just letting the current positive cashflow from my existing portfolio get eaten into by the negative cashflow of the new properties until rents eventually exceed my payments. That's how frustrating my market feels.

[@Ryuish1337]

What if they have extra equity in the home, do they pay the home owner on the equity and then resume the mortgage through a note?

[@almmason7]

Both

[@brendascally116]

Excellent ways to creatively finance, meet new people and find deals while helping others

[@creativefinanceplaybook]

Thank you 😊

[@jayyyy0284]

Anyway to clarify the DTI example you used of 1600 rent offsetting 1600 debt? That doesn’t wipe out to zero, it hurts the debt to income %. Am I thinking of that incorrectly?

[@richardbehn8147]

It helps the DTI by $1200 based on DTI ratios banks follow

[@hotrodlincoln7186]

Mmm, when your buying a home subto it's best to have a 3rd party service provider to make the monthly pymt. So, basically the service provider takes the monthly pymt amt from your accnt then transfers it to the bank that the loan is in. So, when the home owners are wanting to get another house. The 3rd party service provider shows that someone else is paying for the mortgage. Thus it shows that the buyer can in deed afford to pay for another mortgage. Pace goes all over this in many of his video's.

[@creativefinanceplaybook]

That is correct. However, we do not buy subject to. We buy with a wrap so you do not need to involve a third-party company. The new note in place is all the lender will need. Wraps offer the sellers more protection than subject to.

[@hotrodlincoln7186]

@creativefinanceplaybook true, but buying on a wrap most of the time is more costly for the buyer than sub to. Selling a wrap is good but not buying on a wrap. Unless it's rare that you get a better deal than a sub to deal

[@hotrodlincoln7186]

@creativefinanceplaybook buying on a wrap is good for those who don't have good enough credit to get a bank loan

[@apostlemarvinomede3961]

@@hotrodlincoln7186that is so true. Because I was thinking, the seller will not just Will everything to you the buyer at the same interest rate with which he bought, how will he now make a profit? Assuming he has little equity.

[@creativefinanceplaybook]

@@hotrodlincoln7186 buying on a wrap so you don’t have to use banks. That’s the key to scaling, and getting way better terms than the banks will give you.

[@user-sz4fz6ou8u]

Where can I get more in-depth training for these concepts? This was a flyover.........How are you paying for all these promissory notes (wraps)?

[@creativefinanceplaybook]

Love to help! We get the money to pay the promissory notes from our renters. ❤

[@richie1317]

Please cover pros and cons of a strat. Focus on the cons so that you can steelman the strategy

[@quincyjones5676]

I’m doing research to start investing in Chicago but I’m scared cuz I don’t know what I’m doing and I live out of state California I’d way too expensive to invest in 😢

[@creativefinanceplaybook]

Many of our California friends invest in other states because they are less expensive. However, this works very well in California with more expensive properties too.

[@heribertorivas1427]

Who wants to give away a home with equity build on it already. Because he never said that he paid anything to the seller only paying the same amount of the mortgage. 🤔

[@creativefinanceplaybook]

That’s a great point. Yes, if the seller has equity, we will take over making their existing payment, and we will also determine when we have to get their equity cashed out. This is called a balloon payment. That is years down the road not months. Many times we have 5, 10, 15 and up to 30 years. Every situation is different in every sellers needs are different. 😊

[@joyallen2415]

This is my question as well? If the seller wants any money which it seems like they would, how much do you negotiate to give them as a down payment? I don't see where $100 will do it. Is it just that they get a balloon payment at the end?

[@kriswang2953]

This is for seller who are motivated to sell with zero or negative equity. For seller with a lot equity, you want to go with seller financing route.

[@apostlemarvinomede3961]

@@creativefinanceplaybookYOU GUYS JENN and JOE are the very best. You answered the question correctly. You figure it out by making arrangements with the seller

[@apostlemarvinomede3961]

@@creativefinanceplaybookPlease Joe, I will want you to address this question for me, I am seeing that you people maybe doing what I will like to call “half wrap” why because..?? In a normal wrap, there is suppose to be a little increase in Principal price and interest rate: Example: A house Purchase price is $60k Interest rate is 5% Monthly Payments: 15/mo Restructuring the deal for sale Down payment. $10k negotiated with seller Interest rate 6% ( negotiated with seller) Now you are WRAPPING $50k At 6% interest a little more than what the seller bought it for Pls is this what you do or call a wrap? And on the other end, if the seller has equity you plan a structure to cash them out in a balloon payment. Awesome 😂. Correct

[@shanitadopson7526]

Would this concept be good to get people out of foreclosure?

[@creativefinanceplaybook]

Yes! This works great for sellers that are in foreclosure! You need to find out how much money will it cost to reinstate the loan. Also known as, how much money are they behind on payments to get the loan current.

[@nizamishka]

what happens during Subject to deals or wrap with the note, if seller defaults or passes away?

[@almmason7]

Seller can't default, buyer is paying the loan off directly. You wouldn't send the money to the seller but directly to the mortgage company under sellers name and you'll have access to all the loan info as agreed at closing with attorneys and or title company, depending on your state.

[@nizamishka]

@@almmason7 well the loan is still under seller's name and hence the liability. Even though buyer is taking over the payments, i don't get the part why seller can't default or even what happens when seller passes away? Wouldn't bank in this case start foreclosure process as the borrower declared bankruptcy or passed away?

[@creativefinanceplaybook]

No, if the seller passes away, the bank will still collect payments as long as they’re received on time

[@angelwngs2012]

So what if you need the equity to purchase your next home?

[@creativefinanceplaybook]

Great question! As much as we would love to buy every property, this strategy doesn’t work in every case. So if a seller needs top pricing and all of their equity right away to buy their next property, we might not be the best fit for them. If they are a little flexible on when they get cashed out, this is a great solution.

[@soytj8475]

Do you pay the seller the equity they have in their house over time? Or not at all? Since you own the deed now and you get all the benefits of appreciation and equity build, or am I missing something? I still fail to see what problem it solves for a seller unless they are running out of cash, in which case wouldn't it be mote valuable for a seller to sell their property and take the equity?

[@fredkim01]

So this was a master lease deal then

[@toddboothbee1361]

I will have about 200k after selling mineral interests, and want to invest in rentals. My only work was a couple years buying and selling minerals (oil and gas), so I have no dependable income to use for getting a mortgage. Should I pay cash for my first property, rehab it, then rent it? Will the income from the investment property allow me to leverage my next deal?

[@ChaoticWrath]

With a mortgage, you can claim 75% of rental income up front as "income" against the mortgage debt (for calculating DTI ratio). After a year as a landlord, you should be able to claim 100% of rental income. In a situation such as yours, it may be a wise choice to consider house hacking/owner occupancy for multifamily. Without knowing more, it's hard to say definitively.

[@toddboothbee1361]

@@ChaoticWrath thanks! I'll take a closer look at house hacking

[@richardbehn8147]

I would go for a 3 unit and carefully research the market I bought in

[@LaurenJones-rv6ke]

David I'm trying to wrap my mind around how to talk to pitch "subject to" to a homeowner/seller. How exactly do I analyze a Sub2 deal? I'm so glad I asked! What would help me wrap my mind around it is by using a Bigger Pockets Sub2 CALCULATOR (hint hint). Does this makes sense? I understand Sub2 in theory but I have no idea how to analyze it. Thanks!

[@creativefinanceplaybook]

That’s a great question! We actually created a Creative Finance deal analyzing calculator to find out quickly if you have a good deal, a great deal, or a terrible deal and you should run!

[@behnamhp5898]

Why would someone sells the low APR mortgage with the same exact payment and get another loan for the next house with higher APR !

[@199tigertail]

I can’t find the deep dive on BP. Does anyone have a link they would be so kind to share? Ty

[@creativefinanceplaybook]

What deep dive are you looking for?

[@creativefinanceplaybook]

The deep dive is coming our July 3rd on the BP Rookie podcast

[@dennishowland7495]

Carolina worried about your cardiovascular morning routine I want to hear about real estate holdings to Fox River hundred dollars don’t wanna deal and get it

[@user-ux3cl2rm9f]

Any insight on how the promissory note impacts the sellers taxes. Wouldn't they have to report the interest amount on their taxes as income even though it would never be realized?

[@jjsupremeorta15]

I structure mine with sellers as their interest being a secondary mortgage for the entire length of a balloon. 0% interest on paper.

[@carryjoseph9414]

The way you keep it is give them 2 years to buy you out of a lease option .. 2017 movie in date. That’s how you loose an asset

[@dianewignall2139]

In what states with such low down payment? Not Massachusetts!

[@creativefinanceplaybook]

Yes! Even in Massachusetts. We just bought a $300,000 condo right outside of Boston, with only $5000 down. The seller financed the balance at 1.5% interest amortized over 30 years. This works everywhere.

[@apostlemarvinomede3961]

@@creativefinanceplaybookthis is it again… a little increase in interest rate. Not the exact interest rate amount with which it was initially bought. Thanks Joe

[@jimmyjamesinc.8850]

Like the content but a lot of words. Needs visuals. How much does it cost to throw up a spreadsheet?

[@creativefinanceplaybook]

What type of spreadsheet would you like to see?

[@jimmyjamesinc.8850]

@@creativefinanceplaybook not necessarily a spreadsheet, but even just a table outlining an example project. the video is super informative but its hard to track the numbers to see how a wrap or owner finance strategy works. visuals help especially on the boston example. got lost in the credits and debits. thanks for the great content

[@creativefinanceplaybook]

@@jimmyjamesinc.8850 I agree, I’m a visual learner as well. I understand how helpful it is to see how it works. We love to share deal breakdowns, but we were on a limited time for this podcast.

[@onedropontv8863]

All these strategies are a time bomb waiting to go off. One major turn in the economy and this will cause a major blow to anyone holding these assets. There will be a lot of bankruptcies coming

[@creativefinanceplaybook]

I think it’s actually the opposite. When using Creative Finance, we are buying turn key, cash flowing assets with much lower payments than you can get from a bank with much lower interest rates too. When investing in real estate, there is always risk. Buying properties with creative finance just helps you limit the risks and puts the buyer in a better position for success. 😊

[@richiepipes8960]

Scared money doesnt make money

[@baischgolfer]

How do you structure that ‘Mirror Wrap’ if the seller has equity? One promissory note exactly mirroring their current mortgage payment and terms, and then….? Excellent episode, thank you for all the knowledge 🙏

[@EM-gg2hy]

Wondering the same

[@creativefinanceplaybook]

Great question! If the seller has equity, you would just do a wrap around, surrounding the sellers equity, and current mortgage balance into one grand total, but still paying the payment of the mortgage, and buying down the principal at the same rate as the underlined debt. I hope that helps clarify 😊

[@baischgolfer]

Aha, awesome thanks so much for the reply!

[@apostlemarvinomede3961]

One quick question, if you pay to the bank, how will the seller has get his own equity out if you pay to the bank ( both mortgage payments and seller equity.)

[@apostlemarvinomede3961]

I thank God for understanding, let me humbly answer my own question. I think that is why like in SubTo. Service company is employed to cover the disbursement of the wrap money paid to the seller ( equity and the mortgage payment to the bank ) from the same buyer. Then the service company send money to the seller who pays his old seller what he may still owe on the house and the same service company pays directly to the banks, on the seller behalf instead of paying the seller directly. AWESOME THE WRAP COUPLE 👏👍🙏. Thank you Joe and David and Rob had Bigger Pockets.🔥

[@jacobboulette]

Im in Pace's subto mentorship. The way to fix this with subto is to make payments through a servicing company. That way you can show trackable payments.

[@harry554]

Why would any seller ever do a wrap?? Why not just sell normally?

[@richard-qg9ii]

Sellers have different reasons. If a property will not sell, or they understand the tax hit they will take upon an immediate sell. I've done wraps, subtos, and other owner finance deals. Some of my best deals too.

[@bigdadee6]

If nobody paid the taxes on the house and the property was siezed. Who would the government go after in a subject to or Wrap deal?

[@funkychunkymonkey77]

That is a good question ^ say you subject 2 it and then neglect taxes. The owner loses the home right? Yes you have the deed but ultimately the original owners payments stop and they lose there asset? 😮

[@yolandacarrera1765]

That’s odd, on the contrary, I think David Green can explain this making it simple and easy grasp.

[@tusharvlogs846]

Who was their coach ?

[@creativefinanceplaybook]

Our original coach was Ron LeGrand, he is awesome! We just interviewed him on our KZbin channel and podcast.

[@angelwngs2012]

When you are younger it is easier to Puc up and move. When your 60 plus a little harder. We are not investors, just want to move out of the heat of AZ. Feel Stuck

[@Krymoff]

💯👍

[@creativefinanceplaybook]

Thank you 😊

[@Krymoff]

@@creativefinanceplaybook thank you for sharing your experience and helping others ‼️ 🤩 ❤️

[@jazzyrick]

I would have a question about current equity in the sellers home. For example they have a mortgage with a remaining principle balance of 200k, but the home would generally hit the market for 300k or something. I understand the note part, but how would the seller get their 100k in equity, or maybe a better question would be how would you structure a deal like that so that it's beneficial to both parties involved?

[@baischgolfer]

This is my question as well

[@almmason7]

I'm guessing but since it's a creative deal it's however they want it to be, agreed upon by the seller. So, they pay the mortgage through the Wrap then send an additional payment to the seller amortized in monthly payments, sometimes with a Ballon payment (paying off equity $) after so many years. or not. Sometimes with an interest rate added in. This is all agreed upon through the Title company & or Attorneys.

[@alexcameron2880]

You can take over their existing payments subject to, then create a wrap note for their equity and lump it into one payment through escrow.

[@apostlemarvinomede3961]

You all are so on point, during his narration; he didn’t go into much details. Pay the bank directly or through a service company like subject 2 and create a note for the seller equity ( which in most cases, for a Wrap, there is usually a little down payment to promote seller equity. And a little higher percentage interest than the initial mortgage and interest payments of the seller ( mortgage). This create a structure that will also be followed by you the buyer to resell tomorrow if you want to. Example: Seller / Investor Property is $60k Interest rate: 3% Monthly Payments: $20 Equity $25. New structure Property: $90k Down Payment:$15k Balance:$75k So you are to WRAP AROUND A MORTGAGE on/ Principal amount: $75k Interest rate:5% Terms:30yrs

[@JaydonRose]

What a bomb of an episode! 😝💥🥹💥💥💥

[@creativefinanceplaybook]

Thank you for watching! 😊

[@iceguy8112]

Can anyone make a Bigger Pocket Business podcast so ppl can learn wisdom from all kind of businesses?? Btw awsome lesson from him "find a motivated and nice off market seller so you have higher closing chance" also "call them back before they wipe meaning contact them quickly before they're less motivated and talk to other agents"

[@creativefinanceplaybook]

Always respond before they wipe 😀

[@OAMHEALTH]

@@creativefinanceplaybook 😂

[@innercircle.propertiesglob5162]

Any complications in case of VA loan?

[@creativefinanceplaybook]

No, Va loans are easy to do this way.

[@jjsupremeorta15]

Youre only allowed to do very little wraps each year. Otherwise youll have to become a licensed broker/lender.

[@taylormeador248]

The way they’re doing it the seller is creating the note not them.

[@jjsupremeorta15]

@@taylormeador248 I watched it, I know that. I mean for a buyer selling it to an end buyer. When the original buyer owns it.

[@almmason7]

Probably depending on the state your in

[@guilty_pleasure]

Can I do creative financing with LLC owned properties?

[@creativefinanceplaybook]

Yes you can!

[@joanharder2124]

From Michigan moved to Florida 7 years ago! Best decision ever! Great content! Realtor in Venice. Getting ready to invest!

[@creativefinanceplaybook]

Best move ever!!

[@jakesflippintrippin1140]

So if there is an underlying mortgage of 200,000 and then you create a note in a second position for $200,000, it seems like you now owe $400,000? Please clarify

[@chercha9441]

Not second position. You just creat another note for the $200K, but in this case the $200K is between you the buyer and the seller who owns the $200K to the bank. So you’re just paying the seller who turns around and pays the bank. The way they set it up, they deposit the money directly into the bank account that pays the bank. There is no 2nd position involve.

[@jakesflippintrippin1140]

@@chercha9441 ok I sorta get it, I guess I need to do one to fully see it in action. Thank you for clarifying!!

[@apostlemarvinomede3961]

@@chercha9441correct interpretation

[@katelynch3475]

Where is the bonus deal deep dive?

[@creativefinanceplaybook]

We share a lot of those on our KZbin channel 😊

[@ryansatchell2302]

What would happen if the newly wrapped mortgage isn't paid ? Will the bank expect payment from the sellers and/or come after them? Additionally: if you are now making direct payments to the bank for your newly wrapped mortgage/promissory.. how does the original mortgage get paid off? Even if they can use 75% to offset this monthly balance... would they not still carry the orignial balance? Or does their balance decrease as the new mortgage is paid? If someone could break this down that'd be awesome.

[@stevenholiday6435]

The mortgage is paid down, just like Uncle Jimmy was paying the bills for an unemployed family member. If the buyer stops paying the monthly bills, the home goes back to the seller, the original mortgage holder. So the seller would take back the house. The buyer would be out the monthly payments that were made and any improvements/maintenance he or she paid for.

[@detectivekimble6932]

I can't overpay where I am and get cashflow. I'd say that only happens in certain areas. I can't even cashflow buying below market. I have to buy renovated and leave the equity in to have decent cashflow. Generally, a seller with equity has no incentive to sell this way unless you'll pay more than market. If someone wants to sell one that's not market ready without hassle, maybe I get a good deal, but it's unlikely to be in a place I want to hold and rent. I either need to become content with renting in worse areas or invest in another area I guess. I have jus never been willing to keep things I can't manage personally and I've never wanted to own properties that I wouldn't be comfortable living in. Detailing the phone conversations was invaluable.

[@CraigCastanet]

Gotta love David Greene. It figures he was a cop. I love cops. They're not always nice, but they do the toughest job on the planet, make society civil, and are treated like shit.

[@ef5842]

I would like a second property as a duplex to rent out so I can visit my relatives a few times a year. But I heard taxes and property insurance went up in FL. So maybe there are midwest states that are lower.

[@creativefinanceplaybook]

Yes! Taxes and insurance are definitely going up in Florida

[@quiksilver1j]

Florida is full ..

[@creativefinanceplaybook]

lol never 😊

[@TruthNBible]

Before wipe ….🤔

[@creativefinanceplaybook]

True story 😂

[@antoniostephano]

Correction: The buyer signs the promissory note payable to the seller.

[@maryammostafa1564]

But WHO pays the seller for what they put in the property?

[@almmason7]

They only get $ money if they have equity and that depends seller by seller. If they have to move then it won't matter, they'll be happy to get out without paying the realtor the fees and closing cost for direct to seller deals.

[@janeho2808]

Newbie here, I have a few questions not sure if will get answers here 1, Joe mentioned a few sellers have concerns that deed is transferred but mortgage is still under their name so he offers rent to own….but in my feeing, majority of the seller shall feel this way? What if the buyer doesn’t pay ? The buyer owns the house and I, the seller is still responsible for the debt? (I guess it is a question for subject to, since wrap gives another note that protects the seller) 2, what the bank will say? When the borrowers is not the owner anymore? Will they call the loan due right away or force you (the new owner) to refinance at todays rate?? 3, the lady who sold the 2007 built in pretty good shape condo to Joe at 300k with 1.97% interest rate, why she wouldn’t put the house on market, even get $250-280k, put that in the bank saving account, today she can get interest income 4.5%? I am missing something and this case didnt make sense to me😂 Especially ARV is around 325k… 4, when you offer seller subject to on a free and clear property, what interest you offer? I assume you have to follow the current market? Otherwise, back to number 3, they can sell on market and put the money in the bank to make a decent interest income?

[@freedomgunsandliberty]

First

[@alexcameron2880]

You shouldn't buy on a wrap and sell on lease option in Texas. It doesn't work. You MUST buy on wrap sell on wrap there. Texas sucks for the record. :)

[@creativefinanceplaybook]

Correct, Texas is only state where this is a challenge. You can do a lease option in Texas for only up to six months. After that, you can still sell the renter the house. But most likely in Texas, you buy on a wrap and sell on a wrap. Or buy with a wrap and rent the property.

[@alexcameron2880]

@@creativefinanceplaybook You also cannot get a non-refundable option deposit. The only exits are wraps or rentals, which is debatable because property taxes are insane.

[@MyGarden-os6dd]

The sellers have to have a lot of trust in your guests... because if your guests stop paying on the note to the seller, the seller is in deep trouble... and need to go through a foreclosure process that can be very costly... I would never ever agree to such contract. On top of it, sounds like your guests are getting the property for the amount owned on it and pocketing all the equity that was paid off by the seller earlier.... does not look as a smart thing to do for the seller... Interesting that banks would take the note seriously without checking your guests credit and having trust in their ability to pay the note.... sounds too complicated, too risky - almost like a scheme taking advantage of people who might not be able to evaluate the whole situation well..... no, no and no 🙂

[@creativefinanceplaybook]

Thanks for your comment! I get where you're coming from. This isn’t something that you should try without having a proper education on the subject. Trust is key in deals like seller financing and wraps, and we make sure to build that trust with everyone we work with. We always aim for win-win situations where sellers get a peace of mind. It's not about taking advantage-it's about creating solutions that work for everyone. We've got a track record of happy sellers and buyers, and we're committed to making sure everyone understands and feels good about the deal. We're here to help people reach their real estate goals responsibly and creatively. Yes Yes Yes 😊

[@christobar]

Rob you look tired dude, make sure to take care of yourself.

[@Phantomyre]

Im having a hard time understanding how this method would be better than selling the normal way.

[@richiepipes8960]

Same. Why would anyone agree to this.

[@kaleb4256]

A lot of folks who are in tough spots, bad credit, or are facing foreclosure, or behind with arrears. The properties may also need fixing up that they can't afford to do, and they just want to get the responsibility off them. Subto is a lifeline, gets them out of tough spots, and lets them move-on, the buyer's payments also helps boost or restore their credit with good payments.

[@apostlemarvinomede3961]

You said it all

[@theexponent3834]

That's right. This channel's hosts talk nonsense for 20 minutes before starting to talk productive.

[@patrickborges6616]

Honestly, as long as you can break down these topics and categories of Real Estate into chewing size chunks and flood our brains with inreplacable information, these long videos will alway be okay.

[@ef5842]

Your kind of business really seems to take two to work it successfully.

[@creativefinanceplaybook]

Not really, many of our clients that we help are solo entrepreneurs that are very successful. Hiring help once you start to scale is helpful.

[@ItsBenBarber]

Almost first 😂

[@richiepipes8960]

Why would anyone agree to this? If i bought my house for 200k and its now worth 400k, and i owe, leta say 50k on it, why wouldnt i just sell it for 400k, get my lumpsum payment and pay my mortgage off? Seems so much simpler...houses are selling like hotcakes in this market, theres no reason not to sell the traditional way

[@freefoodtv]

You would not get the full amount. Tax. Fees. Etc

[@emanuelcollado1343]

Unrealistic

[@creativefinanceplaybook]

In what way?

[@harmoniousembodiment7203]

Way too much rambling. 5 minutes in and they are still talking about random irrelevent personal things. Get to the point. Time is valuable.

[@creativefinanceplaybook]

Watch it on 1.5 speed ?

[@dojoparsnip9905]

if you value time why are you in a rush? if i value my favorite food or snack, do i make it disappear as quick as possible?

[@javiervictoria1582]

Believe it or not u can actually fast forward videos

[@sarawaters3260]

Totally disagree with you - they were so personable and made me feel like they’re so much relatable! I felt inspired by hearing their story ❤ loved the episode

[@Wavyysav]

Understood but at another point understand we are human.

[@2009molinaal]

Why make videos every day. supposedly are very successful realstate investors but spend every day making videos. And not buying realstate.

[@creativefinanceplaybook]

Making videos of something that I’m already doing is actually really easy and fun. Sometimes we just go LIVE and show our office while we are doing deals. Sharing is caring 😊