Myth #4: It’s just too complicated.

Why do people shy away from creative financing?

It’s all about myths and misconceptions.

In this article we’re going to look at two related myths. One is that creative financing is too complicated, and the other myth is that “my expert knows creative financing”. 

Having spoken to hundreds (that’s not an exaggeration) of people over the phone, I hear these myths pop up a lot. 

Myth #4a: It’s Too Complicated: Creative contracts can be intricate and require careful legal review, it will complicate my taxes, etc. 

Truth: The implication to this myth is that traditional deals are simple, but creative deals are not. There are a lot of moving parts in a creative financing deal, this is true.  However, what most people don’t realize is that there are a lot of parts to a traditional deal also.  In a traditional deal you have a realtor or real estate agent helping you, in a creative deal you have an experienced investor helping you.   

That’s right. In a creative deal you have an experienced and accredited creative financing investor helping you. The investor (the buyer) and the property owner (the seller) are not at odds with each other. In fact, all the deals we do involve us teaming up with the seller to help them make the best financial decision for their situation. 

As part of the Creative Financing Real Estate Association, our experience and network of legal experts gives us the ability to streamline the process and keep things very simple for the seller.  Ask lots of questions and become familiar and comfortable. If you don’t feel the deal is working, just speak up.  If we discover that a creative deal is not a fit for you or for us, we’ll tell you.  

Myth #4b: My (realtors, real estate agent, attorney) has been in real estate for 20 years so they much understand this. 

Some sellers feel they want their realtor or some other property expert they are familiar with to review the documents. We encourage this but with one caveat.  Most realtors and even most real estate attorneys are not familiar with creative financing and will often advise against a creative deal out of ignorance of the process.  If you are unsure if the person you are having review the documents has knowledge in this area, simply ask them when was the last time they were involved in a creative deal and who the investor was that they deal with.  If they can’t answer these questions, they are probably not the person you should be asking. 

There is nothing wrong with seeking additional council for something you are unfamiliar with.  Just be sure to ask the right people.