One of this things that I found that I am really good at in Real Estate Investing is raising capital, without using my own money or credit. In this video, we are going to talk about the two strategies that I use when buying real estate with out money or credit. The first strategy I am going to talk about is called Subject-To Acquisition, Subject-To Existing Finance, or just Subject-To. The second strategy that I will be speaking about is called Owner Financing or Seller Financing. This is a staple in The Kwak Brothers’ real estate investing strategy.
Subject-To Acquisition, Subject-To Existing Financing or Subject-To is one of the tools we’ve used to build our real estate portfolio. It has several benefits when buying real estate without money or credit, for both the seller and buyer. It provides the buyer a chance to acquire a property without borrowing from a bank or even borrowing from an investor because you take ownership of the property without carrying the debt. This strategy is beneficial to the buyer because you can have bad credit and no money but still have a chance of acquiring the property. On the other side, this strategy is beneficial to the seller because if the seller is in a pinch and needs a quick exit from their existing property, you don’t have to go to the trouble of finding a reliable real estate agent. Secondly, since you don’t need a real estate agent to help you sell your property, you avoid extra costs. This strategy also works for multifamily type buildings. Let’s say a landlord is tired of dealing with tenants, running into financial hardships (circa 2008), or the property is vacant and is not cash flowing the way the owner expected.
Owner Financing/Seller Financing is another financial tool that we have used in buying real estate without money or credit. This strategy is VERY flexible as far as the terms for acquiring rental properties. And again, similar to seller financing, you can avoid the bank and all of their stringent requirements to secure a loan. Owner/Seller financing is again mutually beneficial for both seller and buyer. It’s beneficial for the seller because, again, no requirement to hire a real estate agent to sell the property, so you can avoid those fees. And a great kicker is also, negating certain tax liabilities once the property is fully depreciated.