Creative Finance Academy Library

Creative finance uses unconventional and flexible funding methods to structure deals without traditional banks. It involves negotiating tailored agreements—such as vendor financing, lease-to-own, asset-based loans, or crowdfunding—to overcome capital or credit barriers. This innovative approach boosts flexibility and access to opportunities.

Seller finance is a real estate arrangement where the seller acts as the lender, allowing the buyer to make payments directly to them instead of getting a traditional mortgage from a bank. The buyer typically makes a down payment and then pays the seller in instalments over time, often with interest. 

“Subject-to” (or “subto”) is a real estate financing method where a buyer takes over the existing mortgage payments on a property, but the loan remains in the seller’s name. The buyer controls the property and makes payments on the seller’s existing mortgage without formally assuming the loan.

A hybrid combines seller financing and subject-to by having the buyer take over the seller’s existing mortgage payments (subto) while also paying the seller directly through a separate loan. It mixes both methods for more flexible financing.

The Morby Method lets sellers get a large down payment by holding a second lien while a DSCR lender funds the first mortgage. A gap lender provides extra funds to help the buyer qualify, then gets repaid at closing. This way, sellers get more cash upfront and buyers secure financing.

Lease options are agreements where a tenant rents a property with the option to buy it later, usually at a set price. Part of the rent often goes toward the purchase, giving the tenant time to decide while building equity before buying.

Wholesaling is a real estate strategy where an investor finds a property at a good price, puts it under contract, and then sells or assigns that contract to another buyer for a fee—without actually buying the property themselves. It’s a way to make quick profits by acting as a middleman.

Investing in real estate using creative finance means buying properties with flexible, non-traditional methods—like seller financing, lease options, or subject-to existing loans—rather than relying solely on bank loans. This approach helps investors acquire properties with less cash upfront, easier qualifications, and more control over the terms.

Private money lending is when individuals or private investors lend money to real estate buyers or investors, usually for short-term loans, instead of traditional banks. These loans often have higher interest rates but faster approvals and more flexible terms.