There are many different ways to suggest creative financing in the real estate world. One of the more popular ones right now is owner financing with other people’s money when you can tap into money through retirement accounts that people don’t want to invest in the stock market. That’s a good strategy but it takes a lot of work to find those people.
You probably know that the lack of homes on the market is at least partly due to the fact that people wanting to buy up in the market are not listing their homes. For investors, a better strategy today is buying a homeowners’ place and leasing it back to them. Like many investing opportunities, there are a limited number of possibilities on the market. But it’s the creative approach that makes the money.
A big opportunity today is helping people that want to move into a bigger or new home. People that need to sell their current home and also need to finance the next home. That doesn’t need to take much, if any money out of your pocket. What these people need is a contract showing the house they are in has been sold.
It’s about what motivates sellers. There is a small market out there for middle aged and older people that want to change houses. It is an investor’s opportunity to buy low, lease for a few months, and sell high. You’ll be helping people do what they want to do and making a living at the same time.
Yes, you’ll need to finance the purchase. Creative financing would be to use other people’s money when putting the property into your name. It would be a three way transaction. You buy the house from the current owners but lease it back to them. You allow them to continue living in it for several months until their new house is built or fill the gap between traditional buyers and sellers that have multiple sales and buys going on at the same time.
For investors, the point is, that a gap in the market is when traditional sellers want to “buy up” but also need to sell their most valuable asset (the home they live in). It’s a changing market place. In days gone past, the banks would creatively find a way to fund these deals. That doesn’t happen anymore. Today, it’s a way for the private investor to make money in the real estate market.
Please leave a comment if this article was helpful or if you have a question.
Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for seven years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. In the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.