Real Estate


Good morning!

As you all know, I try to keep LTRE as relevant as possible in order to add some sort of value for you guys! Recently, I find myself continuing to drop the term “creative financing” to people. Just last week it happened with a couple looking to purchase their first home. They fell in love with a unit that had to be a cash purchase as the property was currently being used as collateral for the builder’s construction loan, making it ineligible for any other outside financing at this time.  I suggested to them that we could “get creative” with the financing! Two weeks ago I was at a networking event and a woman asked, “How do you afford to invest in multiple properties?” To which I basically responded “You just have to be creative!” Let’s talk about that.

So, as we do, let’s talk Real Estate, let’s talk CREATIVE FINANCING…

Now “creative financing” is a term that tends to really aggravate people. That conversation from the networking event I mentioned above? It started and ended like this:

Woman from Networking Event: “How can you afford to invest in multiple properties?! Do you have millions of dollars sitting around?”

Me: “Oh no, definitely not. You just need to be creative!”

Woman from Networking Event: **Rolls eyes** “That is what everyone says. What does that even mean?”

The good news is, we ended up becoming BFFs and talking all night after that. I appreciate straight shooters and besides – this woman had a point! You hear investors say “creative financing” all of the time – but what the hell does that actually mean?!

So, I want to spend today breaking that down.

The truth is that there really ARE so many creative ways to finance a property but you have to be willing to do the research!

Now I was always raised to never talk about money AND there are very few people I will discuss personal finances with BUT the point of LTRE is to provide RE transparency and besides, these are business finances anyways 😉

So I want to share with you how I have been able to finance my investments and then we can discuss ways OTHERs finance theirs!

Strategies I have tried…

Strategy #1: PARTNER UP

I was lucky in that my two (now) business partners had already pooled their cash together to buy a property up in Binghamton. They asked me if I wanted to buy in and join their group. There is power in numbers. Three people tend to have more buying power than one person and can help accelerate asset acquisition. The first property I invested in was a property already owned by my partners. They had purchased the property with cash, and I bought in to the company for ⅓ of the property value. Luckily, this property was not crazy expensive, AND I only had to pay for ⅓ of the acquisition price, so for this purchase, I was able to use savings.


Sometimes properties are just not eligible for financing, but that does not necessarily mean that they are a bad deal. In these instances you may need to use cash to make the deal happen. For me, Project Philadelphia HAD to be a cash deal.The home was not mortgage-able and there was no way we would get a bank to finance it. SO, we took out a couple of personal loans. Personal loans can come from anywhere – banks, friends, family members, etc. WE took a personal loan from

If you are ever interested in using SoFi – check out my promo code below – you will get $100 back on your first loan!


Strategy #3: MORTGAGE

Now, I don’t know that taking out a mortgage on a property should necessarily be considered “creative” but you can leverage them in creative ways! I will walk you through what we did up in Binghamton. I mentioned that my business partners had purchased their first property in cash, we will refer to it as #1. A few months later, we found a more expensive property we were looking to purchase, let’s call it #2.  SO, we took #1 + #2 to the bank and packaged them together. We were able to pull 75% of the equity OUT of #1 and used that cash to put the down payment on #2 – essentially no new dollars out of our pockets! These two properties now sit together under one blanket loan. Oh, and did I mention that #1 appraised a bit higher than what we had purchased it for?! This gave us access to even MORE funds. Woo!


Our bank offered an option for us to use what is known there as a Loan Management Account. It is essentially a line of credit secured by your existing securities such as stocks and bonds. There are definitely pros and cons to this account but the biggest pros I have found so far is that, for us,  there is no strict pay off date and they have fairly reasonable rates. Our plan is to pay this off the minute Project Philadelphia is complete. Different banks have different names for this type of account so check in with your local banker to see if this is an option for you!


Reinvesting your profits can be super beneficial.Our business operates under the assumption that we will continue to reinvest any profits for the foreseeable future. This was actually really helpful for us last year when we ran into a significant amount of unexpected maintenance. The snowball affect of reinvesting your profits can be astronomical. So as much as you can, I highly recommend this!

Strategies others have tried…


KEEP IN MIND I HAVE NOT USED THIS AND YOU PROBABLY CANNOT USE THIS METHOD IF THIS PROPERTY IS IMMEDIATELY ACTING AS AN INVESTMENT BUT, you can borrow up to $10,000 from your IRA ($20,000 if you are married) to put towards the purchase of your first home. So, if you purchase the home (using the money from your IRA) and live it in for a while before turning it into an investment property – then this would work! You could also try this strategy if you are house hacking! It is important to note, once you withdraw this cash from your IRA, you only have 120 days to buy a home otherwise you are subject to a penalty charge and taxes.

You can also borrow from your 401k. The rule tends to be that you are allowed to borrow 50% up to $50,000. Again, this is typically only for your primary residence.  The catch here is that you will only have a few years to pay this back so it is important to make sure this loan repayment schedule is doable for your personal situation! Oh, and not to scare you, but if you leave or lose your job while you have this loan out, it can become due within 60 days or you are subject to a 10% penalty. So use this with caution!


You can borrow against permanent or whole life insurance. Unfortunately you cannot borrow against term life insurance as it does not have a cash value and does have an expiration date. Check with your insurance agent to see if this is a possibility for you!


In some instances, the seller may be interested in acting as your bank. You can negotiate a loan agreement with them that works for you both! In 2017, there were 89,779 owner-financed notes, which totaled $17.3 billion dollars according to Note Investor- so it happens more than you think!

Strategy #9: LEASE OPTION

This is where the buyer pays the seller money in order to have the right to purchase the property at a later date. This option prevents the seller from selling the property to an outside party. That being said the buyer has no obligation to purchase the property. If the buyer does not purchase the property by the date specified in the lease option, then the seller has the right to sell the property to an outside party. 


A lot of investors get their start in wholesaling! You can make a TON of money in wholesaling using virtually no money of your own. You can then use THATprofit to invest in a rental property. I have yet to successfully do this but to be totally honest I have also put very minimal effort in trying this route out. If you are ever curious about how this works, I suggest reading “If You Can’t Wholesale After This : I Got Nothing For You” by Todd M. Fleming.

Some choose to start out in REI with a flip! If done correctly, you can earn a quick profit and invest that in a rental. I follow a very successful investor who always borrows money to flip, and uses that profit from the flip to invest in rental properties. He does this cycle on repeat. He never has any debt in his rental properties, so any revenue is straight profit for him. Other successful investors do not suggest ever owning your property 100% for liability reasons – that is all totally personal preference and we can talk about that in a later post!


The power of brainstorming and working with others is unparalleled. It is BEYOND beneficial to bounce ideas off of each other. I will say I am pretty decent at numbers, and marketing, and strategy (for the most part) but I am DEFINITELY not the strongest member on our team when it comes to anything lending / finance related. I am grateful fo have business partners and a smart husband with a finance background than can help me bring these dreams to life. 

Now I know today was a SUPER long post, but I want to end this by saying, I am NOT a financial advisor, nor do I promote over leveraging yourself. Debt can get you into a ton of trouble. If your property cash flow does is not greater than your debt payments then most likely, none of these methods will work for you.  But the question was – how do people get creative with their financing? So here you go! It is all about thinking outside the box! 

Let us know if you have used other methods to finance your places!! I love learning new strategies!

Feel free to comment on the blog post HEREand let us know what YOU think!

Happy Wednesday!


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2 thoughts on “let’s talk : CREATIVE FINANCING

    • Author gravatar

      Thanks for going through this, Erin. Always so many ways to try to get creative. I remember as a kid my friend’s dad being a RE investor and agent. As an agent he had a painter as a client who found the perfect home but couldn’t afford the downpayment. As he was thinking aloud he mentioned “I have about X dollars of painting I need done in my rentals and he needs X amount extra to make the downpayment… I wonder if there is something there to work out.”

      No idea how that deal came out but it always comes to mind when we’re trying to find a way to get a deal done.

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