By Richard Roop

Recent changes in U.S. housing markets and lending industry have created new challenges for real estate investors. But it also creates incredible huge opportunities if you’re willing to make a few adjustments in the type of deals you go after. How you buy and how you sell should be dictated on what’s happening in the market TODAY… not last year or in years gone by.

Let’s look at the proven methods for collecting big checks as a real estate entrepreneur and how targeting sellers who have higher equity can get you more cash now, cash flow each month… and cash later.


Retailing in creative real estate is usually based on buying a junker house, fixing it up real nice and then selling it to a qualified cash buyer. In a normal or hot market you can compete with other houses in the same price range because you’re offering a totally remodeled, pristine property.

A rehabber is typically under time pressure to pay off an underlying hard money or investor loan and may not be in a position to offer owner financing. Changes occurring now in the traditional mortgage markets can make relying on a ‘cash out’ buyer more of a challenge.

There are several solutions to this.

First, if you’re in buyer’s market (with some of your competition leaving the game) you can now buy better negotiating lower purchase prices. In turn, you can offer your newly remodeled house at a more attractive price… making it easier to find a buyer.

Next, begin financing your rehab projects with private investors. You can get lower interest rates and a longer repayment term. Then you have the option of selling the property to a tenant buyer or to a contract buyer using wraparound owner financing.

More and more buyers need help financing and by offering the solution you can get a higher price and seller faster.

Finally consider targeting sellers with free and clear houses by offering a very attractive price in exchange for no interest or low interest, long term owner financing. This is easy to do as getting a list of houses with high equity can many times be acquired through public tax and land records.

These sellers must compete in the marketplace just like any other seller. In fact, according to the most recent U.S. census data 1 out of every 3 houses in the nation is free and clear!

Using a small, well-secured private investor first loan you can raise all the cash you need on these deals. Give the seller a down payment if needed, recapture your buy and hold costs, do repairs, pay off existing liens and even put an extra $10,000 or $25,000 in you bank account… on the day you buy.
4/12/2016 12:37:52

This article is very useful for those who want to know about Equity.


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    As a seasoned real estate investor I have used bank financing, hard money financing, mortgage loan brokers to fund my deals. Because these are very limited in the type of "loans" they are allowed to sell they can only accommodate a certain few types of real estate deals.

    For individuals who like to "keep their money working" through these "lenders", thinking that their investment money is more secure through them miss out on investments "secured by real estate", (just as secure as the lenders deals) some deals will have much greater returns under terms that can keep your money longer and that you decided upon.


    January 2014