Creative Solutions for selling your real estate in a down market

Another potential deal killer is the dreaded "down payment". In today's lending environment it is not only more difficult to qualify for financing, but to come up with the larger down payment minimums. If you are a real estate investor you are already looking to purchase homes below market value, either buying at a fraction of replacement costs or building them yourself. When you are able to make a good purchase you are also expanding your options as to what sort of investment will this real estate asset will become. Always try to create as many options as possible. You can rent it out, simple...as long as it cash flows. You can lease option the property, allowing the leasee the option of buying at the end of the lease term. You can try to "flip" the property and put it back on the market immediately. Or, you can combine multiple strategies and come up with very creative solutions for yourself and potential home buyers. A strategy I am using currently is to market a recently acquired property with "100%" financing. If the buyer has decent credit and with interest rates at historic lows, your only remaining obstacle may be the down payment. Well if you're into the property right, you as the seller can hold the down payment in the form of a promissory note with the buyer, which would have a second position lien interest. The bank obviously will have the primary or first lien. This removes the hurdle of the buyer coming up with a large down payment. It will also free up some debt load on your end, while creating a cash stream in the form of the note. I like these types of situations, because it works out handsomely for all parties involved.

A Creative Real Estate Deal - Lots for Duplexes

Today I worked on a deal that is a bit unconvential. Here's how it works. My wife and I purchased a lot back in 2008 and then subdivided it into two building lots. So now as we are looking to sell we found a developer in town who is looking for buyers of his "to be built" duplexes. They are actually zero lot line homes, so you could end up selling them individually as well as renting them. The developer is selling them at somewhat of a discount, so the buyers are getting a good deal, the developer is making his money from the land. He purchased a sizable chunk of land and then short platted it to build these homes. Anyway, he is giving me full market value for each lot I have, while I in turn am going to buy 2 homes, or 1 duplex from him. The purchase and sale will take place simultaneously, so I can take some of my sales proceeds to put down on the homes. The developer makes a bit of money on the construction, but mostly in the land. He is even paying all of my closing costs. It works out for everyone, especially in todays market. My wife and I plan to either lease option the homes or rent them out for a few years. They are in a great location, which is always key, so we believe this is a great deal structure to create a win win situation. If anyone else has a similar deal structure or has completed one in the past, I'd love to hear about it.

Justin
Real Estate Investing Resource