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Creative Finance Real Estate: Why Creative Finance Is Exploding
In today’s market, high interest rates and tight lending standards are leaving a lot of good deals stranded. Traditional financing often doesn’t work — and that’s why creative finance is the weapon of choice for serious investors.
As Pace Morby says:
“When banks say no, that’s where creative finance begins.”
Creative financing lets you solve problems banks won’t touch — whether it’s a seller behind on payments, an investor who doesn’t want capital gains, or a deal that needs both equity and debt layered together.
What Is the Stack Method?
The Stack Method (also called the Morby Method) combines multiple financing strategies to make a deal work. Instead of relying on one tool (like a bank loan), you “stack” different solutions:
- Subject-To (SubTo): Take over the seller’s mortgage payments.
- Seller Carry-Back: Seller finances part of the deal.
- Gap Loan: Short-term loan to cover down payments/EMDs.
- Private or Hard Money: Funding for repairs or short-term holds.
- Equity Partnership: Share profits with a capital partner.
Each layer fills a gap until the deal closes.
Real-Life Story: Columbus, OH
One of our investors found a duplex in Columbus, Ohio listed at $280,000.
- Seller owed $190k on an existing mortgage.
- Seller wanted $260k net.
- Bank financing didn’t work — investor lacked 20% down + didn’t want to pay today’s 7% rates.
Here’s how the Stack Method closed the deal:
- SubTo: Buyer took over the $190k mortgage at 3.5% interest.
- Seller Carry: Seller financed $50k at 0% interest for 5 years.
- Gap Loan: We provided $20k for EMD + closing costs.
- Cash Flow: Duplex rented for $2,600/month, covering all expenses and leaving positive cash flow.
Result: Investor acquired the property with almost no money out of pocket — a deal banks would’ve killed.
Creative Finance Real Estate: Why Creative Finance Wins
- Flexibility – Customize deals around sellers’ needs.
- Solve Pain Points – Help distressed sellers walk away with dignity.
- Scalability – Stack methods make it possible to buy multiple deals at once.
- Beat the Competition – Other investors get stopped by banks; you don’t.
Creative Finance Real Estate: Risks & Our Solutions
- Complex Contracts: Multiple layers = more paperwork.
Our team works with attorneys to draft airtight contracts. - Seller Trust: Not all sellers understand creative finance.
We provide credibility tools (proof of funds, liquidity, references) to win trust. - Execution Risk: Missing one payment kills trust.
We connect clients with servicing companies to handle payments.
Creative Finance Real Estate: Authority Backing
- Pace Morby (SubTo) – “Creative finance is how you create opportunities when everyone else gives up.” (YouTube)
- Jamil Damji (KeyGlee) – Known for building wholesale empires using creative JV and funding structures. (BiggerPockets Podcast)
- Cody Sperber (Clever Investor) – Another major figure teaching creative financing methods. (Official Site)
FAQs About Creative Finance Real Estate
Q: What is creative finance in real estate?
It’s the use of strategies like subject-to, seller financing, gap loans, and partnerships to structure deals without relying on traditional banks.
Q: What’s the Stack Method?
It’s the practice of layering multiple financing tools (SubTo, seller carry, gap loans, etc.) to make a deal work.
Q: Is creative finance legal?
Yes — when structured properly with attorneys and title companies.
Q: Can your company help structure deals?
Yes. We specialize in funding gap loans, EMDs, and partnering on creative transactions nationwide.
