We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Creative Real Estate Investing?

John Lister
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Creative real estate investing is a catch-all term for making money from property in ways other than the traditional method of getting a mortgage to buy a single house and then selling it at a profit. Technically, the term could cover buying a house outright with personal cash, though this usually wouldn't be considered as being in the spirit of the term. Instead, it covers a wide range of activities, some of which are merely associated with the house-buying process. Creative real estate investing does not usually carry the negative connotations or implication of wrongdoing, as do similar expressions such as creative accounting.

One of the main examples of creative real estate investing is an option. This works in a similar fashion to options used for less tangible financial assets such as stocks. An option involves a property owner, or an agent, selling the right to buy a house on or before a set date at a set price. The buyer of such an option would hope that market prices increase before this date, allowing him to exercise the option and then immediately sell the house at a profit. The seller of the option is trading the risk of missing out on a higher sale price for the certainty of getting the cash paid to buy the option in the first place.

Wholesaling involves buying multiple properties at a time and then quickly selling at a property. This might involve bulk buying houses that a bank has obtained through foreclosure, then selling them individually at a low price. In such cases, the individual sale price will likely be very low compared to market value. The profit for the wholesaler comes simply from the fact that the bank will have accepted an even lower price as a form of bulk discount, saving it from the risk of being left with unsold housing on its books.

Tax liens can be another source of creative real estate investing. They relate to the fact that a county government can automatically acquire an interest in a property, known as a lien, if the holder fails to pay property taxes. Some counties will either sell or auction such liens to private investors. The investor then takes on the right to receive the outstanding tax money plus interest, along with the risk that the homeowner may refuse to pay, forcing the investor to seek to foreclose the property.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
John Lister
By John Lister
John Lister, an experienced freelance writer, excels in crafting compelling copy, web content, articles, and more. With a relevant degree, John brings a keen eye for detail, a strong understanding of content strategy, and an ability to adapt to different writing styles and formats to ensure that his work meets the highest standards.
Discussion Comments
John Lister
John Lister
John Lister, an experienced freelance writer, excels in crafting compelling copy, web content, articles, and more. With...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.