Before you can shake hands and call a deal done, you’re gonna need to close. Here’s some tips on getting your deals done from Lance Edwards. (Credit: Laura Glover/SXC.hu)
Trying to get your multi-family deals done, but scratching your head as to how to do it? Believe me, you are not alone.
I know what it’s like to struggle over how to get these deals done firsthand watching everyone from novice real estate entrepreneurs up to even my Apprentice-level students.
Fortunately, we’ve got a list of ten creative techniques you can use individually or in a combination, whether you are a rehabber, wholesaler or buy and hold entrepreneur.
See Also: Top 2 Fears of Real Estate Beginners (And How to Beat ‘Em)
In this lesson, you will learn:
- Innovative applications for closing multi-family deals
- The importance of mindset, creative thinking
- Where to find more ways to get real estate deals done
Here’s a closer look at the strategies you can use to get those deals of your to-do list:
1.) First Mortgage: You go to a lender to get a first mortgage.
2.) First Mortgage Paper Cash Out: You can get a seller to carry back a first mortgage and if he wants cash instead of payments, then you can sell the note. You can do this for private investors as well. A seller might want to be cashed out.
3.) Second Mortgage: You can get a seller to carry back a second mortgage or you can get someone else to finance the second mortgage for you.
4.) Second Mortgage Paper Cash Out: The seller is carrying back the second mortgage and there are people who will buy the second. You are simply keeping the first in place. There will be a heavier discount but there are people who will buy second lien positions and you can cash out the seller that way.
5.) Blanket Mortgage: You’re getting a seller to carry back a second but they want extra collateral. You allow their mortgage to blanket over another piece of property that you own.
6.) Blanket Over Other Collateral: You want the seller to carry back the second mortgage but the seller wants more collateral. So, say you have a boat or a car or something else to offer as collateral. You can offer that piece of collateral and make that part of the lien.
7.) Deferred Down Payment: This is a way to get an interest free loan. You buy the property and either assume that the seller has first mortgage or you get a new first mortgage. You then give a down payment 12 months from now. This is another way of rephrasing a second. Calling this a Deferred Down Payment implies that there is no interest being charged.
8.) Barter: Trading something for something. This is getting in the creative arena. Let’s say you have talent as a bookkeeper and you want to buy the property, you could barter your services against the down payment on that property. You could provide 12 months of bookkeeping services and if you need the seller to carry back $20,000, then you provide $25,000 of bookkeeping services. You then have the seller carry back a note on the property.
9.) Barter Assets: Instead of putting a mortgage, for example, on your boat, you give it to the seller as consideration for a down payment on the property.
10.) Turn Around Joint Venture: You could approach landlords of distressed properties that may be out of state. The landlords are amenable to terms that you can agree on so you agree to a joint venture. You come in and turn the property around and they give you half ownership in the equity that they have. This is a great way to get in a deal with no cash.
Your ability to put together multifamily deals is only limited by your imagination. Think creatively. There are plenty of other options available to you. In fact, you can learn more about how to close these deals in my book, How to Make Big Money in Small Apartments.
In the book, you can find a wealth of advice not covered here on the blog, plus for the first time ever outside my paid seminars and student coaching, 16 Small Apartment Strategies you can use to build wealth, from quick cash through wholesaling, to creating net worth through forced appreciation, to passive income through buying and holding.
For Real Estate Success, See Also:
- Video: Why Multifamily is an IDEAL Investment
- Mike Warren: ‘If You Owned a Bank’
- Automating Your Life? This One Fatal Flaw Could Ruin It All
Want more great real estate investing advice? Get Lance Edwards’ Deals & Dollars Weekly newsletter for tips, hints and resources delivered to your inbox every Friday.
