One major challenge faced by real estate investors is funding and acquiring deals. Conventionally, investors purchase investment property by paying in cash or by borrowing money from banks and financial institutions. However, it is not always the case that investors are able to raise cash upfront to acquire a deal nor all properties or deals can qualify for financing by traditional bank loans. Fortunately, there are alternative ways, regarded as creative financing, to structure deals and secure capital.
Our Gracious Sponsor
Watch the episode here:
Listen to the podcast here:
In the concluding episode of our four-part series with Sterling White, he talks about his experience using creative financing when they acquired their first multifamily deal. He shares the process of approaching the owner for a seller financing option and goes into details of the deal structure. Hear some pieces of advice on pitching creative financing to sellers and be warned of some pitfalls in buying. Listen now and learn how to utilize creative financing options in your business so you won’t miss out on deals.
Key Points From This Episode:
- Sterling describes the process of securing financing for his first multifamily deal.
- Why traditional lenders and financial institutions will not lend money to finance Sterling’s first multifamily deal.
- How Sterling resorted to an alternative, creative way to finance the deal by approaching the seller to agree to a seller financing option.
- Sterling’s advice on how to pitch seller financing to prospective sellers.
- What is a three-year balloon type of deal structure and why is it advantageous to the seller?
- What types of debt did Sterling’s company use for succeeding deals?
- What’s one mistake in buying that Sterling cautions buyers about?
- Sterling’s predictions on the real estate market for the next 6 to 12 months and how they prepare for a potential downturn.
- Sterling’s best source for meeting new investors and how he pushes out digital content for marketing and building a personal brand.
- The most important metrics that Sterling tracks.
- Daily habits that have produced the highest return for Sterling and the number one thing that’s contributed to his success.
- Ways that Sterling gives back and his contact details.
“Be creative about financing deals and finding capital.”
“What really helps is just laying it all out transparently.”
“Take time throughout the day to just sit and think.”
“I do not take anything personally what people do because people act in their best interest. Sometimes, someone’s best interest is not in your best interest. So, just accept that.”
“I see the world for what it is and not what I believe it should be.”
“Go out there and don’t be afraid to make mistakes.”
Links Mentioned in Today’s Episode:
About Sterling White
With just under a decade of experience in the real estate industry, Sterling currently manages over $10MM in capital deployed across a $26MM real estate portfolio made up of multifamily apartments and single-family homes. Through the company he co-founded, Holdfolio, he owns just under 500 units. Sterling was featured on the BiggerPockets Podcast Episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single-family investing and apartment investing to mindset and scaling a business online.
Love the show? Subscribe, rate, review, and share!
Join the Real Estate Syndication Show Community: