Have you noticed that purchasing properties at a deep discount isn’t nearly as easy as it was even six months ago? Nowadays, it seems everyone is out picking the low-hanging fruit of the real estate market.
The key to remaining profitable is to get creative about squeezing profits out of your deals. Lucky for you, today on The Epic Real Estate Investing Show, Matt shares 5 creative ways to finance your deals. Learn how he doubled the amount of offers his business got accepted in the last six months, how he recognizes and prepares for change, how to stay one step ahead of the competition at all times, and more!
What You Will Learn About 5 Creative Ways to Finance Your Deals:
- Why getting creative about financing your deals is absolutely essential in current times
- Why hearing uninterested people talk about real estate investing is a warning sign (and what it means)
- The huge reason you can’t rely on “low-hanging fruit” when investing
- Why real estate investing will never go out of style – but your strategies might
- How Matt doubled the amount of offers he was getting accepted 6 months ago
- Matt’s strategies for recognizing and preparing for change
- How to catch deals like no one else!
- 5 creative ways to buy real estate
- Why you need to check in with your local banker ASAP
- Why teamwork can be the key to massive profits
- The important link between seller motivation and creative financing (and how to use it to your advantage)
- How to create magic out of situations where there appears to be no deal at all
- It’s been great meeting you virtually. Would you like to meet in person? Our next live event is right around the corner! Go to EpicIntensive.com for the details.
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- Need training? The ultimate training environment for real estate investors: Version 3.0 of The Epic Pro Academy! New look, new lessons & new content – we’ve got everything you need to know to get your first paycheck!
- Need someone to do it all for you? If you’re an Accredited Investor, you can diversify your portfolio by hitching your wagon to our train and share in the profits. Go to EpicWealthFund.com to download the executive summary.
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Speaker 1: If opening up your financial statement each month is about as exciting as watching paint dry, the Epic Wealth Fund may be the next investment opportunity for you. The Epic Wealth Fund invests in a distressed real estate and shares the profits with its shareholders. If you’re an accredited investor who has already enjoyed success elsewhere in their business or investing life, and you’re seeking a broader exposure to real estate in your portfolio on a passive basis, the Epic Wealth Fund’s executive summary is available for your review. Go to epicwealthfund.com to review the funds’ executive summary. Epicwealthfund.com.
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Matt Theriault: This is Theriault Media. Broadcasting from Theriault Studios in Glendale California, it’s time for Epic Real Estate Investing with Matt Theriault.
Mmm. Yeah. Set. Hello and welcome. Welcome to Epic Real Estate Investing, the place where I show people how to escape this darn rat race using real estate. You just gotta shift your focus. It’s really simple. Shift your focus from making piles of money. Leave that whole saver’s mentality behind. Stop making piles of money and focus on making streams of money. Adopt that residual mindset. Change that one thing about yourself. Change that thing just one time, and you are on your way to financial freedom at ten times the speed. It’s not the most exciting path, but it is ten times the speed. It is the fastest, and that there I promise to you.
And once you get there, life then becomes exciting. And speaking of excitement right now is an extraordinary time to be searching for real estate deals. And I’m finding the greatest opportunities right now with my creative deal structuring. And in many markets, you may have noticed if you’ve been running any sort of a real estate business over the last few years, many markets are experiencing solid steady appreciation again. Right? Builders are starting to build again. That’s a sign of appreciation ’cause they’re not gonna build if they can’t sell their house for more than what it cost to build them. Those values are coming up to a replacement value, which means the market has bounced back significantly since the lows of 2007/2008, which means purchasing properties at deep discounts isn’t nearly as easy as it was a year ago, is it? Or even six months ago. But no worries, there is still plenty of profit to be had.
But likely less and less of that profit will come to you by way of just making straight all-cash offers, by just getting deep discounts on your offers, less likely to happen in the foreseeable future. You’re gonna have to get creative in squeezing out profit from your deals. And I’ll be spending the next several episodes on just this, getting creative, using your intellectual currency more than your actual currency. And before I get into today’s episode, I wanna warn you about what you’re likely to start hearing. You’re gonna start hearing some chatter. It could be a year or two away, could be six months away. It might be next month. There’s no crystal balls here. But I’ve been doing this long enough to have recognized market patterns. And when you start hearing your barber or your dentist or your unemployed brother in law, meaning just about anyone that typically wouldn’t have any interest in or business conducting real estate investing, when you start hearing those people start talking about it, that’s a warning that change is probably on the horizon here.
And I’m hearing the very beginnings of those types of conversations at cocktail parties and social events. And being a member to many online real estate communities, and you might be noticing this too … Over the last year or so, there’s been a surge of people posting pictures of very large checks in these communities on social media. In a sense, it appears, “Wow! Everybody’s doing this and everybody is crushing it,” giving the impression that it’s easy. And recently, I guess it has been. There’s been a lot of low hanging fruit out there the last few years. And when you hear a story from the grocery clerk or your coffee barista doing deals on the side, there’s only so much low hanging fruit that’s gonna be available to go around.
There are plenty of deals, there’s always deals. But that low hanging fruit is what’s really getting snatched up first. And the more apple pickers you got out there, those good apples at the bottom of the tree are gonna become fewer and further between. And it’s this dynamic that’s going to force change. And I don’t think there’s any cause for alarm right now. I’m not here to scare you, not by any means. But you wanna be prepared. You wanna prepare yourself for this change. And this change doesn’t mean the market is going to go from good to bad. No, it’s just gonna be different. And how you prepare yourself for this is how you prepare yourself for anything. You educate yourself. You train yourself. You develop new skills, or you strengthen your existing skills.
Until shelter goes out of fashion, until a roof over your head falls out of trend, real estate will always be where it is and there will always be deals, because the deals happen because of some sort of life event for people. Right? Some sort of life event that causes some sort of distress, whether that’s financial distress, or personal distress, or just wear and tear on a property causes the physical property distress. That happens every single day. There will never be a shortage of deals ’cause life happens to people every single day. Right?
So until that roof over your head falls out of fashion or it falls out of trend, real estate’s always gonna be where it’s at. Just know that the rules change every once in a while, strategies must be modified. Different skill sets must be called upon to seize the opportunities that exist each time market shifts. So, I’ve been preparing for this over the last year. My business is getting lean and efficient. And we’re pushing the envelope with creative deal structuring. And we’re doubling, right now, we’re doubling the number of offers that we were getting accepted six months ago by simply offering multiple solutions to motivated sellers and some not so motivated sellers. We’re getting deals from them as well. Options that they didn’t even know existed, those are the types of options we’re offering to people.
And all this so far to say, keep your eyes and ears open for change, for the chatter at your next birthday party. Watch social media. Pay attention to traditional media. And when the news starts to get a little too positive, when it starts to get good. The news starts to get optimistic, recognize that we’re on the brink for change. And regardless of what you do here, stay focused on your mission. Don’t get distracted. Don’t get sidetracked. Stay focused on your mission, on your business. Keep the saw sharpened and ready for change, because that WalMart greeter that’s flipping properties on the side, they won’t be. They’re not a professional like you are. So you wanna keep honing your skills, keep opening up your minds to education. Keep your eyes and ears open. Don’t walk around with your head in the sand thinking the deals are never gonna stop, ’cause they’re not gonna stop, they’re just gonna move.
They’re gonna move to somewhere place different. So what we’re gonna do is we’re gonna talk about or start the conversation of how to position yourself and how to find those deals once they do move. And maybe you can catch deals that are still there, just no one else knows how to capture them. That’s the goal today. That’s the goal over the next several weeks. So let’s go over five creative ways to buy real estate, five creative ways to buy real estate. And we’re gonna do that right after this.
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Matt: All right. So we’re gonna begin with a general overview of five creative ways to buy real estate. And then, in the coming several episodes, we’re gonna dive deeper in detail into each one of them and then some. And I’m really excited to share creative financing with you … creative financing, creative investing, creative deal structuring, all of that stuff, because that’s exactly how I got started. And I’ve never … I don’t know if I’ve admitted this. I thought about it. But when I got started, I didn’t really actually know what wholesaling was. I knew about subject two, and creative deal structuring, and seller financing, and seller carry back, and of course all the traditional forms of acquiring real estate. I’d heard about all that.
A lot of that stuff was circulating in my environment as a real estate agent so I’d heard about it. But I didn’t really know what wholesaling was. So I’m really excited to share. And I’ve become a very good wholesaler. And I’ve created an amazing wholesaling operation since I learned them. It’s five, six years ago now. No. I guess it’s more than that. I’ve been saying five or six years ago for a couple years. So we’re probably like eight, seven or eight years ago. So I’ve become very efficient at wholesaling. But it’s nice to get back down to the parts of my real estate business, we’ve done this over the last year, that really built my portfolio, that really created the Epic Empire over here.
That means how I built my entire portfolio, so through the types of deals that I’m gonna be sharing with you today and in the foreseeable future. All right? So number one, number one, conventional financing, conventional financing. Now, I understand that that wouldn’t normally fall under the category of creative, but I invite you to look at this in a slightly different way. You see, we’re still at historic lows when it comes to the interest rates. And the banking guidelines, they’re starting to loosen up a bit in case you didn’t know. They are. So it might be time to go check in with your local banker. And if you’re going to use other people’s money, you always wanna take advantage of the cheapest money that you’ve got available to you. And right now, that would be the bank’s money, but it might not be for too long.
So the creativity comes in here with regard to, how can you get some of this cheap money? Do you have the credit means yourself? If so, I would go and start looking into that. At least getting qualified, so if you come across a deal, you can pull the trigger and you’re ready. You might wanna tap into that right now if you haven’t already. Now if you have, if you’re way ahead of me, if I’m preaching to the choir and you’ve maxed out your credit, the available credit you have for purchasing properties, I want you to look at it this way. Who else’s credit can you tap into? Are there people in your world with solid credit and solid financials that would be open to partnering with you by simply offering their credit score, so to speak, to do a deal?
My good friend Christian Martinez, he’s purchased almost his entire portfolio this way. See, he’s got time to go find the deals. He has one partner that brings in the down payment. So they’ll bring in five, ten thousand bucks every single time. He’s got another partner that qualifies for the loan with their credit and their employment situation. And then he goes out and he finds the deals and then manages ’em from that point forward after they acquire them. And they are three-way partners, and they’re building wealth in a way that they couldn’t if they were doing it all by themselves. So there’s a thought on creativity and seizing the opportunities of the current lending environment. So that’s number one.
Number two, and probably my favorite … I’m not gonna say “my favorite” for last. I wanna talk about it right now. And that’s seller carry back. At whatever point you hear somebody looking at purchasing on terms, they’re referring most of the time to creative financing, and most commonly the means that the seller of the property … that means the seller of the property is involved in some way, carrying back a mortgage. And knowing how to structure these types of deals, these can double, triple, quadruple the number of deals you do. And what a seller carry back is, if you don’t know, instead of you borrowing the money from a bank to purchase a property, you borrow the money from the seller of the property. The seller becomes the bank and they loan you the money to purchase the property.
And the creativity right here is really unlimited by only your thinking. And much of that creativity is inspired by why the seller is selling in the first place. You wanna get down to the core of their motivation. That’s the foundation of every deal, lies within the seller’s motivation to sell. So where is the motivation? That’s gonna inspire the creativity for you. Sometimes, they’ll carry back and they’ll finance the property for you because there’s no other way for them to sell the property, or maybe they just flat out don’t need a giant chunk of cash right now. And there’s everything, every possibility, in between. So understanding the seller’s motivation is very important to when you’re putting creative deals together, especially if you’re gonna involve the seller.
Now, more often than not, this type of structure will not be a long-term solution for you. There’s typically a shorter time period on the financing here with the seller that there is through a traditional 30 year or even a 15-year mortgage. But that’s okay. The creativity and flexibility that can be had right here are like no other, an opportunity for yourself can be created at every single corner. Just the ease of acquisition alone is enough to add this to your toolbox, meaning typically no credit score is required, no appraisal process is required, no underwriting process. And it’s not uncommon for there to be actually no downpayment required either. So seller carries back, that’s number two.
Number three, subject two. This subject two strategies, it’s an incredible approach to funding a real estate deal quickly. However, it’s almost always a short-term solution. I’ll say most the time it’s a short time solution. And the phrase “Subject Two”, that originated from the expression, “Subject two existing financing”. So, if there’s financing on the property already, that’s what you’re tapping into. You’re gonna leave that in place. What it does is it implies you purchase the property on the condition that the current financing stays in place, under the seller’s name. The title is exchanged, however. The existing financing stays in the seller’s name, but the title is transferred to your name.
This is an ideal solution for the seller when they need to sell fast. And it’s an ideal solution for you, as frequently it can be a no money down deal, so that’s ideal for you. And it can give you time to find alternative financing that will be in your name so you can do it quickly. That’s convenient for you. Or it can serve as a bridge loan, so to speak, while you go out and you look for either a wholesale buyer. Or it can serve as a bridge loan while you take the time to fix it up, to fix up the property and sell it for top dollar at the retail level. In the event that you deploy this strategy to fund a deal, understand it’s your responsibility to follow through on your word and make the payments of the sellers financing on time. Okay? You gotta follow through.
And there are other nuances here. Actually, there’s several nuances here that will require your attention. But that’s the gist, and we’re gonna go over that in detail in the coming weeks. Number four, the seller second, the second carry back, closely related to seller carry back. The strategy can be extremely helpful in putting deals together. The seller second, what that implies is that the seller gives a second home loan. And normally, the second one would be large enough to cover most of or all of your down payment to complete your conventional financing loan. Got it? So if you’re approved for a loan … and this could be a traditional loan through a bank or it could be a private loan from Aunt Millie. But the loan, if it’s not enough to pay for the entire property, you can ask the seller to carry back a second to complete the transaction, to seal the gap there.
And this way, the seller gets most of their equity out of the property. They get most of what they want, and they get some interest payments to boot. And it’s typically a good win/win scenario. And you get into the deal, typically using very little to any of your own money. Another option for a second to complete a no money down acquisition for yourself could be a credit card or a credit line, just like the ones Epic community members are using from epicfastfunding.com. So that’s number three, the seller second, or get creative like a credit card and use that as a second.
Number five, lease option, at long last. In the event that you can’t figure out how to fund your real estate deal, you can propose a lease option. You can do a lease option. The lease option, what that does it permits you to get into the house for practically zero cash down, and it gives you the exclusive privilege to purchase the property in the future. You get first rider refusal for the future purpose, typically. It could be one to three years. What this does is the time period will give you the opportunity to obtain long-term financing, or find a buyer for the property, or you can find a buyer for the option. Additionally, you can structure your deal so that a portion of the monthly lease payments are applied toward the eventual purchase of the property. So a lease option is a great strategy to acquire and control property. So there are many more approaches to funding your deals and we’re gonna go over a ton of them in the coming episodes.
And what we’re really … it’s gonna get really exciting is when we start discussing how you can use a lot of these different strategies I just shared with you in conjunction with each other, and to really just create absolute magic where it seemed like there was no deal there at all, creating unlimited opportunities for you and the sellers of your deals. So if you’re determined to create financial freedom for yourself investing in real estate, you’re gonna find a way. And I’m gonna show you many different ways ’cause it’s never a money problem. Most people think it’s a money problem. It’s never a money problem that’s gonna stand in your way, just an idea problem. And one of the ways that we’re creating new ideas, how we’re inspiring new ideas within ourselves … we’re getting more and more creative with ourselves, and then we’re inspiring that same type of creativity with the motivated sellers and some of the unmotivated sellers … is through using a three-option letter of intent. Now, you’ve heard me mention it here before, more than once, multiple times, ’cause it’s a staple in my business.
And right now, I gotta tell you, it seems to be working better than it ever has. And I’m thinking it’s no secret that a lot of people are in marketing right now, a lot of people are in marketing to the same sellers. They’re making all-cash wholesale offers to the point where they might be sounding just like a bunch of noise to sellers right now. And every offer they get kind of looks and appears or sounds the same. But because we’re following up with some additional options, we’re getting I think greater consideration than we were before when we were just sending out a single all-cash offer.
So I’m gonna go deeper and deeper into this over the next several episodes, but if you’d like a copy of that calculator that was the same one that we use and a Microsoft Word template of the letter that we send, you can go to epicloi.com, epicloi.com. You can get familiar with that right now. And that should create an elevated listing for yourself in the next several episodes. There’s even a video there that I show you how to use it. So go to epicloi.com. All righty? Many new and creative ideas to come. So I will see you next week. I’m Matt Theriault, living the dream.
Speaker 1: You’ve been listening to Epic Real Estate Investing, the world’s foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed the show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We’ll see you next time here at Epic Real Estate Investing with Matt Theriault.