The Creative Financing Podcast
Business:Investing
In this series we continue the Pop Quiz from Jeff and turn the focus to deal structuring. We apply creative financing principles to deal structuring using real life examples. We cover the following:
Determine your buyer- Who are my Buyers: Flippers, Landlord, Owner Occ, Retail Buyer (on Market)
High purchase price, Down payment, monthly payment, Low equity- Owner Occupant.
Owner occ- term to be 3yrs minimum.
Get in light- 5-7%. Not a hard number. We need 30days to find a buyer.
What would be a good monthly payment for a property, affordably. Would it make sense as a rental? Median price range of rents.
What's enough equity to have to make it a deal work- price is the least important criteria when using creative financing, down payment and monthly payment are the most important.
How much can you raise the price when selling on terms? Within reason. Does the condition justify the price? 10-20K above market value
How to determine length of term- depends on your exit strategy and who your end-buyer is. Also how long of a term works for the Seller, and what is their goal with the proceeds.
How much can you offer when selling to a Landlord
What's too much for repairs? Depends on down payment and who's your buyer. But cash on cash returns for a landlord needs to be 12% min. That's the all in cash required for down payment, repairs, closing etc. Equation equals cash flow x 12 divide all in cash = cash on cash return. Return needs to be a minimum of 12%. Unless, however, the landlord can do a cash out refinance after repairs and stabilizing, therefore lowering the out of pocket cash requirement.
How much of a ARV discount should we try to get from a landlord? Look for value add, or equity. Cash on Cash return. Also, least important is cap rate.
When do we shorten the amortization schedule? To make a payment work in our favor. More so for principal paydown.
Hope you enjoy, And to get special access to a step by step video on how to structure creative financing offers, text CFP to our hotline at 877-409-8090 or click HERE.
Ep 163 The Big 5- How To Make Multiple Offers
Ep 162 The Big 5- How To Make Multiple Offers
Ep 161 pt5 The Big 5 How To's- Continuing On Down Payments
Ep 160 pt 4 The Big 5 How To's
Ep 159 pt.3 The 5 Big How To's
Ep 158 pt.2 The 5 Big How To's
Ep 157 pt.1 The 5 Big How To's
Ep 156 pt.2 How To Use A Hybrid Interest Rate
Ep 155 Pt.1 How to use A Hybrid Interest Rate
Ep 154 How To Modify Offers When A Seller Counters
Ep 153 Financial Calculator Review, A Must Know
Ep 152 pt.2 Case Study How To Make A Marginal Deal A Phenomenal One
Ep 151 pt.1 Case Study, How To Make A Marginal Deal A Phenomenal One!
Ep 150 How To Quickly Recognize A Deal.... Or Not
Ep 148 Pt.5 Pop Quiz On Deal Structuring
Ep 147 Pt.4 Pop Quiz On Deal Structuring
Ep 146 Pt.3 Pop Quiz On Deal Structuring
Ep 145 Pt.2 Pop Quiz On Deal Structuring
Ep 144 Pt.1 Pop Quiz On Deal Structuring
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