Skip to main content
All Posts By

Joahanna Reyes

9 Types of Creative Financing in Real Estate

real estate creative financial fund

What is Creative Financing for Real Estate?

Looking to fund your next real estate deal but lacking the financial prowess to do so? You don’t have to be a creative financing expert to get started. 

There are many creative financing deals and options available that will have you owning a house in no time! 

Have a Low Credit Score or No Liquid Cash for a Down Payment?

Creative financing, as outlined by Fortune Builders, was created in the 1970s when interest rates were as high as 18%! This high-interest rate made it very difficult for individuals and families to qualify for traditional loans. 

Maybe you are looking to buy a house, or you have done the research and what to try your hand at rehabbing. Maybe you want a rental property to earn passive income. Whatever the case, there are creative financing options available to help you. 

Real estate is a tried-and-true way to make additional income. If you don’t have a lot of disposable income, this doesn’t mean you can’t own an investment property. You just need to be creative and think outside the traditional loan structure. The following creative financing opportunities are uncommon ways that a person can use to buy property.

Rent To Own

Renting to own is also known as a lease option to buy. 

In this situation, a buyer lives in the property and pays rent until they can purchase the home. The rental period typically lasts around 1 – 3 years in most cases. This gives renters time to build up credit or to save up for a down payment. Some sellers will ask for an upfront fee, or option money, as a good faith payment that the renter is serious about owning. This can be 2.5 to 7% of the purchase price according to Fortune Builders. If the renter/buyer decides they do not want to buy the property after the rental period ends, they will lose this upfront fee.  

It is also common for a portion of your rent payments to be put towards the home purchase. This will also help incentivize the renter to buy the property after the rental period expires.

Seller Financing

When using seller financing, you do not have to work with a third-party lender. Instead, the seller becomes your lender. You and the homeowner work together to decide how payments will be made and determine the interest rate. Your mortgage payments will go directly to the seller. 

Sellers offer this type of financing when they do not have another option, but they must sell their homes immediately. This might happen when they cannot afford the cost of repairs or the current taxes on the property are too high. This is an ideal situation for someone who doesn’t qualify for a loan now but would in a few years. This is easiest when the seller owns their house outright, otherwise, they will have to pay their loan off immediately.

Hard Money

R.E. Tipster explains hard money as an expensive and short-term solution for buyers. Someone looking to purchase a home can obtain money from another individual or business who is looking to invest in real estate.  Often these terms are more lenient than traditional loans.  Certain individuals or businesses may not require a credit check or verification of income.  You can potentially receive money quickly this way, however, term lengths may be shorter than regular loans and the interest rates will most likely be much higher. 

Creative FinancingPrivate Money

This creative financing structure is like hard money except that it typically involves friends and family lending money to the buyer. The nature of these personal money loans can be more flexible since there is already a relationship established between the lender and borrower. Friends and family may also have enough disposable income to lend you money without charging any interest, or at a much lower rate than through a hard money loan. Owing money to friends and family can put a strain on your relationships so should only be entered into carefully.


Crowdfunding is a new phenomenon that allows investors to use money from the public. There are well-established platforms that authorize users to ask for money. Then, random strangers, friends and family, and other people in your social networks can work together to make contributions towards your house-buying goals. 

Real Estate Financing Loans

IRA Loans

Have a funded retirement account? According to U.S. News,  you can borrow up to $10,000 from our IRA to purchase your first home, or you can borrow up to $50,000 from your 401(k). There are restrictions and penalties to using IRA loans, so research these fees ahead of time. Then you’ll know what to expect and whether or not this loan will be beneficial for your home buying experience. 

FHA Loans

Federal Housing Administration backs loans for buyers who don’t qualify for traditional loans. You will be able to pay a lower percentage for a down payment. However, this means you will have to pay for mortgage insurance until you have paid off a certain percentage of your loan. 

Home Equity Lines of Credit

Commonly known as HELOC, are ideal for buyers who already have equity built into a property. Many borrowers can receive up to 90% of the value of their primary residence. There are many benefits to using these loans, however, your primary residence is used as collateral, so be mindful and only select this option if you are certain that you can pay back the line of credit within the terms of the loan. 

Saving Up for a Conventional Loan

Pick up extra jobs, sell belongings, and start asking loved ones for money instead of presents. Set a goal for how much cash you will need to buy the house and attack your goal with determination!

Be Creative

Without a large down payment or high credit score, there are still many options available for you to be able to purchase a home or additional investment property using creative real estate financing techniques. You can mix and match these options and find what works best for you, allowing you to reach your goals for investing in real estate.

Learn More about the Types of Creative Financing for Real Estate at the Creative Financing Podcast –

For other investment strategies and real estate tips visit the Foliolens Blog and sign up for our monthly newsletter

Hiring a Virtual Assistant to Help Manage Your Rentals

shutterstock 1055103716

stopwatch g7bdd4064e 1280 e1642974701668Optimize Your Time by Hiring a Virtual Assistant


Are there parts of managing your rental properties that you often avoid or wait to complete until the last minute? Do you value your time and want to focus on the things that bring you the most joy? Hiring a virtual assistant can be a great way to optimize your time. 


Things to Consider Before Hiring a Virtual Assistant


What’s Your Budget?


Before you decide to hire a virtual assistant, you want to make sure you have the money to do so. Look up the range of pay in your area and figure out how many hours you are going to need to make sure that you have enough income to cover the cost of hiring. This will also allow you to be upfront with how much you are willing to pay.


Where to Find the Perfect Assistant?


Many hiring platforms allow you to look for, and hire, specialists for different aspects of rental management. Do your research on which platforms have the best reviews. There are even platforms that hire assistants from all over the world, allowing you to find the right assistant in your price bracket.


Be Clear and Concise in Your Job Description


pexels startup stock photos 7103Make your job description as detailed as possible and be upfront and clear about your expectations. This will save you time and money by hiring the right person.  Make it easy for your assistant to work with you by being detailed about what exactly they will be doing on a day-to-day basis. Some assistants will apply to many jobs, without reading the fine print. Filter these applicants by including something in your job description that asks them to complete a certain task, such as asking them to write a certain phrase in their application. This will help you only focus on the applicants who pay attention to details. 


Expectations for Behavior, Payments, and Tracking Work


Are you looking for a detail-oriented person or someone who responds quickly to tasks? Be clear and upfront about what you are looking for in an assistant and be sure that their skills match the description. Have documentation already in place before you hire. Then they will have something to refer back to when they have questions, and they won’t need to rely on reaching out to you.


Who Do You Want to Hire?


Figure out which parts of owning a rental property you want to outsource and find someone with those skills. You want to maximize your time doing the things that matter most to you.


Hiring Process


Find the hiring platform that works for you but also makes sure to take responsibility by interviewing candidates via a phone call or video interview. This will help you start building a solid relationship by setting the tone for how you operate. Have a list of questions prepared ahead of time that not only address specifics of their daily tasks but also include questions that show you are interested in them as a person. People work better when they feel valued.


Sample Work 


Have them complete a sample work assignment to ensure you are both comfortable with the relationship before moving forward. 


Project Management Software to Ensure Streamlined Systems


If you don’t already have a project management software system, find one that works for you and make sure they know how to work with this system. This will help you both keep track of work in progress and work that has been completed. 


Ongoing Two-Way Feedback


Keep your lines of communication open. Your assistant should be comfortable coming to you with any issue, as you should be as well. Be clear ahead of time when you will communicate, especially if you are hiring someone in a different time zone than you. 


Tasks to Outsource to Your Assistant


pexels ksenia kartasheva 7035855Once hired, they can provide support by reviewing tenant applications and passing on the top choices for you to review. This will save you a ton of time and energy. VPM suggests that VAs contact applicants if any information is missing, as well as have them check references.

Working within your property management system includes tasks that help you improve and streamline your services, many times being able to automate them. There are plenty of options when it comes to property management software. If you hire an assistant in the beginning stages of owning rental property, then you can have them do the work of setting you up within that system.

Virtual rental property assistants can also do the work of scheduling tenant visits and follow-ups. These tasks may seem small, however they often take up a lot of your time and are easily handled by a virtual assistant as they often require a lot of back and forth communication. This will be especially important if you own rental property as supplemental income or own a lot of properties. Having an assistant schedule these meetings will save you a ton of time.

As an owner of rental property, you probably already have a network of individuals that are available for repairs and maintenance. In an ideal situation, these professionals will be ready and available whenever you need them. However, there will be many times when they are not available when you need them. Your assistant can do the research and contact other contractors when yours are not available to ensure your tenants’ needs are met swiftly and effectively. 

Prospective tenants need to know you exist and have properties for rent! If marketing, blogging, and social media updates are not on your list of things that bring you joy, then hiring a virtual assistant to take care of these vital marketing tasks is a must. They can make sure that potential clients have a way to contact you and can access a list of any available properties you may have. 

Ready to invest in additional properties? Rental Choice reminds owners that virtual assistants can even be used to research and discover new rental properties.  

There are many ways to utilize the help of a virtual assistant that will make owning rental properties a breeze!

How to Manage Your Property from Out of State

Man working on real estate business from laptop

Real estate investing is a great way to make additional income, or it can even become your sole source of income. Either way, when deciding to manage your property from out of state, there are a few things you should consider ensuring this investment is worth your time and money.

Let Return on Investment Be Your Guiding Light

pexels karolina grabowska 4386338Find the rental properties that offer the highest return on investment. states that by having rental properties in other states, you will have the freedom to invest in more affordable areas than where you currently reside.  This may also allow you certain tax breaks as well. Do market research to find the areas that will make you the most money. Dig deeper and look neighborhood by neighborhood to find the best locations. You can even choose to hire a realtor to help you invest in the best locations possible.

Investopedia reminds owners to not just tour the property. It is vital to get an inspection to be sure your investment is wisely spent. An inspection will ensure you budget for any renovations that have to happen before you can rent your property. This will ensure you have the funds to hire the appropriate team to help you run your properties with ease.

Do You Want to Go it Alone or Use a Property Management Company?

This decision is a big one so we will break down both options so you can decide what works best for your situation. 

Managing the Property by Yourself

If you are living out of state, you are not going to be able to manage the property completely on your own. Especially when there is an emergency. So even if you are choosing not to use a property management company, you will still need to have professionals working on your side. 

Selecting Your Team

shutterstock 72903511Having a great heating/air conditioning repair person, electrician, plumber, and general handyman will be essential if you want to manage the property yourself. Do your research and look for strong referrals. Find the best of the best. Once you find one high-quality professional, ask them for recommendations in the other areas. They often have a network of people that they will highly recommend.

Once you have this team in place, be clear and upfront about how you want to use their specialties. Provide your tenants with their contact information along with a list of when they should call them. You can work out contracts with these individuals ahead of time. This way, if they need to handle an emergency, they can do so without your permission, ensuring the work is done swiftly and effectively, especially in an emergency.

Using the Expertise of a Property Management Company

Do your research! Read reviews and get referrals for companies in the areas where you have rental properties. Spend the time upfront finding the right company to work with. These individuals are the face of your property and how your tenants will judge your property. When interviewing these companies, have a list of meaningful questions that highlight what is most important to you. For instance, you can ask:

  • What are your management fees? 
  • What services do you offer?
  • How much experience do you have managing properties and how many current units are under your care?
  • How do they determine rents and how much do they think your property will rent for?
  • What are their policies around vetting tenants? How do they handle evictions? 
  • Do they have any current renters who are looking to rent space?

Most companies will take between 6-10% of your rental income. Many reputable companies will be on the higher end; however, this cost is well worth it in the end. These companies often manage a lot of properties so may even save you money in maintenance and repair costs as they can purchase items in bulk. 

Systems Make Managing a Breeze

As with anything else in life, systems make your experiences smooth and organized. This will translate to how your tenants see you as well. 

Managing the Tenants

You will want to create systems for finding the right tenants, keeping them, and what to do when turnover occurs, whether amicably or via eviction. Think through the things that matter to you and either put them into action or make sure the management company you hire is in alignment with your values. 

If working on your own, you will need to think through things such as background checks, evictions, and how to make tenants’ living experiences so wonderful that they never want to leave. Take the time to build this trust with your tenants! It will save you time and money in the long run. Make sure you take the time to build relationships with your tenants. If you take care of them, they will take care of your property!

How to Manage the Property Itself

You will need a system to tackle regular maintenance and repairs. Be clear about whether you will handle all these pieces or if you are expecting your tenant to do the work and be reimbursed. Many property management companies will take care of all these needs for you.

How to Manage the Finances and Business Aspect of Rental Property Investments

keyboards g1821947af 1920Your system should include how you are going to collect rent payments. In today’s technological world, there are so many ways to do this that you will be able to select the way that works best for you and your tenants. Keep your record-keeping neat and organized, which will save you a ton of time come tax season.

Research Local Laws

Realty Times reminds landlords to check local laws before managing properties from out of state to make sure they are following all local and state guidelines. 

Find What Works Best for You

Owning rental property out of state can be a great way to make additional income or start a career. Ensure you have what you need to be successful by creating the systems that work best for you!


For other investment strategies and real estate tips visit the Foliolens Blog and sign up for our monthly newsletter.