17

off the ferns to raise enough money to bring the deal together. Today, the property is being developed into a multi-million dollar recreational park all because of a patch of ferns – and a creative mind.

Technique No. 23 Splitting Off Part of the Property

In some cases a given property is structures so that parts of it – extra lots or individual buildings – can be split off and sold to raise funds for the acquisition. Here is how it worked recently for an investor we know in West Bend, Wisconsin. He had located an attractive single family home on a large lot with a package price of $99,000. Since he needed to come up with a hefty down payment – he resurveyed the property and established two lots on either side of the house. By the time of closing one lot had sold for $15,000 and the other for $10,000. Contributing the bulk of the down payment to acquire the property in the first place. It was all taken care of in a simultaneous closing.

6. HARD MONEY LENDERS

Hard money refers to funds borrowed from banks under strict conditions of qualifying and repayment, generally at market interest rates. Soft money from sources like sellers comes more cheaply with terms that are generally much more flexible. For that reason creative buyers tend to exhaust soft money sources before turning to the banking industry. Nevertheless, hard-money lenders are an important, if not indispensable source of down payment capital to which buyers, sooner or later, must turn. This section outlines eleven techniques for using hard-money funds in creative ways.

Technique No. 24 Small Amounts of Money From Different Banks

Investors getting started are well advised to cultivate their credit at several banks in their area. Often credit can be built up quickly by borrowing small amounts from different banks and lending institutions and then repaying the loans promptly, even ahead of time. The strategy is to build up credit in sufficient amounts so that funds will be available when that promising deal suddenly surfaces and cash is needed quickly.

Technique No. 25 Cash-By-Mail Companies

Certain specialized lending institutions and finance companies appeal to executives and other well-qualified borrowers through ads in flight magazines and professional journals. The advantages are privacy and speed.

17