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in today's video i'm going to show you how to structure a creative real estate deal coming up hey everybody it's jamelle gibbs listen recently i got a question from someone on my instagram page by the name of sell that home fast and he had a pretty good question in regards to structuring creative deals now as you guys know i do a lot of wholesaling i do a lot of creative deals back in the day i've done a lot of rehabbing i've done new construction i've done commercial deals any type of deal that you can think of in regards to real estate i've been there i've done it over the past 19 20 years and what i found over that time frame is that wholesaling and creative investing fits my personal lifestyle so that's all i do at this point just wholesaling and creative investing i've been doing creative investing for over 10 years i've been doing wholesaling for close to 15 years and rehabbing and things like that i've i've done it since the beginning of my career but i stopped rehabbing uh for the most part as of two years ago but the reason i'm telling you all that is just to uh tell you that i'm you know i've been there i've done it you know i've uh been qualified to talk about this for a long time and that's what i plan on doing so i have my cell phone that died and i had to use my cameraman's cell phone uh today in order to uh uh get this question read pretty much because uh i don't know the question in my heart uh he has a property that he he'd like to do terms on he says it has an arv of 65 to 70 thousand dollars the seller is open to 38 000 on terms and he asked me how would i structure that deal so here's what he had in mind as far as structuring the deal he said he was thinking about ten thousand dollars down amortized over 60 months with an annual interest rate off of uh you know with the 10 000 off for the 38 he's at 28 000 he's uh thinking of an annual interest rate of three percent payments on a monthly basis of 503.12 cents with a balloon payment due after the 60 months of 17 803.83 so he asked me if this looks correct how would i structure the deal how would i market the deal there's a lot of moving parts to this question here and uh there's a couple of different things that's missing uh first and foremost let me talk about this when it comes to creative deals if i were to look at this information that was provided i don't have enough information to be able to dictate which way to go and you're going to understand exactly why i say that as we go on throughout the video uh i appreciate the question by the way i appreciate you reaching out and i'm going to try my best to help you out as as much as i possibly can with the information that i do have so that you can be able to take this information and go ahead and create a deal and possibly put some some profits in your pockets so first off when i'm looking at a creative deal i'm looking to get all of the basic information that you need uh i previously did a video on this on uh reviewing the seller script i'll link it up at the top so that you can uh check it out and you'll have the actual questionnaire that i use in my business or that my virtual assistants use in the business in order to be able to qualify uh a suspect lead and turn them into a prospect uh understanding that suspects turn into prospects prospects turn into deals i want you to download that seller script and i want you to use it watch the video use the script and then you'll have a clearer understanding of why i need certain information uh in order to be able to dictate how to structure this offer but let's just say i had all of the information i needed here's what i want you to keep in mind when you're qualifying a seller there's two main questions that you want to ask in order to determine if the seller is a creative type of seller or not all right question number one is will you take what you owe on a property are you open and if you're willing to take what you owe on a property are you open to a lease option or owner financing if that was an option of working with us all right so that's two questions there will you take what you owe on a property and you know one thing about that question is if the property is free and clear be cautious and asking that question because it's an insult to the seller to say the least the main part of the question the the twofold question is will you are you open to a lease option or uh creative financing owner financing if that was an option that we can present to you and if they tell you yes or no then that's going to dictate our next move thankfully you told me in this particular question that you had to me that you sent over to me that the seller is open to terms and obviously you negotiated a price of 38 000 which leaves some breathing room there now my only question for you would be what was the least the seller was willing to take as a down payment what do they have in mind as far as a down payment in order to get this deal done or are you offering to put down the ten thousand dollars which i think honestly is a is a mistake i'm trying to put as little down as possible on properties especially when i'm gonna uh purchase them or take control of them as little down as possible so the first thing you have to negotiate is your down payment with the seller don't go to the seller and say hey i have ten thousand dollars down will you take this in exchange for doing seller financing you already got the seller to agree to do the the uh seller finance deal at 38 000 so what you want to do in essence is go to the seller and say hey you know i want to make this deal happen you know i know we agreed to the 38 000 how much were you thinking in in regards to a down payment what's the least you can do as far as a down payment on a property because you you might be surprised the seller might turn around and say hey you know i have you know if you give me 2 500 bucks we can make the deal happen or if you give me 5 000 we can make the deal happen that leaves you with more money in your pocket at the end of the day right let's say the seller came to you and say hey give me 2 500 down and i'm and i'm willing to finance it for you you know at the end of the day you get to keep 7 500 extra dollars in your pocket based off of your 10 000 assessment right so that's rule number one let the seller tell you what they're looking for down if it's too high then you negotiate it down but don't ever spit out the first number i know you know the rule of negotiating the firs the the person who offers the number first loses the negotiation right that rings true right here so you definitely want to keep that in mind the second thing based off of that number you know i need to know what type of deal we're structuring here so again remember what the question was are you willing to do a lease option or creative or seller financing on this particular deal so maybe the seller's willing to do a lease purchase on it right that deal will be structured completely different than a deal that is seller financed all right but let's just assume based off of your numbers that the seller is willing to do a seller financed deal there's a couple of things i need to know i need to know if there's a mortgage on a property because then that's going to tell me if we're doing a subject-to deal if we're wrapping the loan or if we're doing a straight owner finance deal so you can see how that little bit of information is crucial when it comes to understanding how we're going to structure this deal but again let's assume that uh based off of what you told me we're going to assume that the seller is doing owner financing and the seller doesn't have a mortgage on the property based off of these numbers 38 000 can work we would just want to know what type of interest rate the seller had in mind i would personally offer whatever the going market rate is on the uh on on the interest so if it's a let's say four and a half percent right now then i would offer four and a half percent if it's three percent then offer the three percent but you have to come to a fine medium with the seller based off of what they're comfortable collecting from you on a monthly basis so number one you need to find out what you already did you found out if the seller was willing to do creative financing and they said yes now you need to negotiate the down payment don't ever put out the first number then you need to negotiate the the monthly payment which will be based off of the interest rate that the seller is comfortable with as well based off of what the seller is willing to collect in their pockets every single month the next thing you need to find out is the the length of time that the seller is willing to allow you to finance this property so you told me 60 months what if the seller is willing to do 30 years don't shortchange yourself again based off of the information that you provided me yes you can offer a balloon payment after a certain period of time but personally i wouldn't shortchange myself on a deal like this i would see if the seller is comfortable uh with me financing it from from them for 30 years if they're not let's say they they do 10 years let's say they do five years if they say five years then what you can do just to keep your payments lower is you can amortize it over 30 years or 20 years or 15 or 10 years right based off again based off of what the payment is going to be and how much you're looking to collect on a monthly basis as far as rent then you can offer the seller a balloon payment within a three to five year time frame based off of what the seller is comfortable with so as you can see you know there's a lot of moving parts to it sellers you know the way you structure these deals is based off of what the seller tells you all you're doing is making it enticing to the seller and you're being creative and doing it you're on the right path but i don't have enough information to be able to tell you how to structure your deal particularly but these are just some things that i would personally be looking out for in the long run now as far as exit strategies are concerned there's a lot of different things you could do you could assign your owner finance contract or your subject to contract i just did it we're making 20 000 on a subject to assignment on uh within two weeks from from yesterday september 9th we're collecting a check for 20 000 for subject-to assignment deal okay that's because i assign my contract to another buyer i didn't feel like taking on that particular property subject to um you can do it through owner financing you can the same thing you could do wholesaling houses you can do an owner financing creative investing you could do the same exact thing or you can turn around and one of my favorite strategies is taking the property let's say subject to owner finance lease option sell it on the other end as a lease option based off of what the market rent rates are and now i increase that by 10 or 20 percent collect money every single month after picking up a down payment so in essence what i'm doing is i'm collecting money three times on those types of deals money up front money every month and then money when i sell the property on the back end so how do you make money let's let's say for example using the five hundred dollars as a as a uh as an example from the seller finance deal what i would do is turn around and put the property up back on the market for 70 or 80 i would put it up for 80 000 in this case because you said it the arv on it is about 65 to 70. i would put it up for 75 to 80 thousand dollars i would turn around and ask for 10 15 or 20 000 down i would make the seller uh the buyer responsible for fixing the property make them have a vested interest in the property and i would turn around if your payment is 500 a month or 503 whatever cents per month i would turn around and ask for 800 to a thousand dollars a month possibly a thousand bucks based off of the market rents increased by 10 to 20 percent i would sell it rent to own and people will pay this because they don't want to go to the bank and get a loan because either they don't qualify or i've had people tell me that they just don't trust the bank so these are all different things that uh i would do in order to market the property and i would first test it out on craigslist and facebook marketplace in order to see what type of activity you get so a lot of things discussed in this particular video a lot of things that you want to keep in mind when you're structuring these deals but at the end of the day negotiate your down payment negotiate your interest rate negotiate the fact that the seller is willing to do something creative and then put the deal together on the flip side decide on what your exit strategy is do you want quick cash or do you want to collect money up front money every month money on the back end and that's how you attack that type of deal and make a whole lot of money doing it hope all you found some benefit in this uh answer i hope all of you benefited from this and uh be sure to share this video like subscribe leave a comment let me know what's on your on your mind and i'll see you on the next one take care you