164. If Your Bank Said No, Watch This Before You Give Up!

🌟 5 Ways to Finance Real Estate When Banks Say No 🌟

Welcome to the Ekabo Home Financial Freedom Mastermind Webinar! In this session, host Niyi Adewole breaks down five proven financing paths that don't depend on conventional bank approval — strategies he's personally used and helped clients execute to close deals when traditional lenders say no.

🔥 Quote of the Day: "Banks are one lane on a multi-lane highway." — Niyi Adewole

💡 What This Means: A no from Bank of America or Chase doesn't mean the deal is dead. Mortgage brokers, credit unions, and creative financing strategies open up entire pathways most investors never explore — Niyi walks through exactly how to use them.

🎙️ What You'll Learn:

1. DSCR Loans (Debt Service Coverage Ratio): Common in commercial deals, DSCR loans evaluate the property's income potential instead of your W-2. Lenders typically want at least 1.2 coverage, a 620+ credit score, and down payments ranging from 15–25% depending on your credit profile.
2. Hard Money Loans: Asset-based financing built for flips and BRRR deals with a short 6–12 month timeline. Niyi shares a real example — a luxury short-term rental purchased for $450K, with $250K+ in renovations, that appraised for $1.15 million after the BRRR was completed.
3. Seller Financing: When a seller owns their property outright, you can negotiate a down payment and have them finance the rest — often at 3–4% interest, well below today's 7.5% conventional investment rates, with flexible 36–60 month terms before refinancing.
4. Subject-To Financing: Take over an existing mortgage and its payments without a traditional loan. Niyi details a real subject-to deal on a short-term rental — no down payment, a 36-month balloon structure, and full creative control over the property.
5. Partnerships & Private Money: Bring in capital, expertise, or credit through a trusted partner, or lend/borrow private money at returns that beat the market. Niyi shares how a family partnership helped him close a 12-unit deal early in his career, and how he's used HELOC funds to lend private money at 10%+ premiums.

🏡 Key Takeaways:

➤ A Bank's No Is Not the End — There are at least five other lanes to get a deal done outside conventional financing.

➤ Match the Strategy to the Deal — Hard money for short-term flips and BRRRs, DSCR for buy-and-hold investors with limited W-2 income, seller financing and subject-to for motivated sellers, and partnerships or private money when you need capital, credit, or expertise.

➤ Trust and Structure Matter — Whether it's a partnership or a subject-to deal, relationships and clear agreements upfront prevent costly problems down the road.

⚛️ Why This Matters:

Most investors stop when a conventional bank says no, assuming that's the end of the road. In reality, some of the most profitable deals — including a $450K property that appraised for $1.15 million — were made possible by creative financing strategies most people never learn about. Knowing these five paths gives you options conventional buyers simply don't have.

🗓️ Tune in every Wednesday at 7 PM Eastern! Don’t miss out on our journey toward financial freedom through smart investments.

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 Our Links

➣ Financial Freedom Mastermind Facebook Group - https://www.facebook.com/groups/53083... 

➣ Peer Space Host Referral Link https://www.peerspace.com/referrals/g... 

➣ AirBNB Host Referral Link https://www.airbnb.com/r/niyia41 

➣ Ekabo Home Network (IG, Youtube, Email) https://linktr.ee/ekabohome

Niyi Adewole is a licensed realtor in Georgia, brokered by EXP Realty. Feel free to reach out at Niyi.Adewole@exprealty.com if you would like to work with an investor friendly real estate agent.

Transcript

Welcome And Why We Meet

SPEAKER_00 0:00

Welcome to the Financial Freedom Master Money Group Podcast. Here we're all about breaking free from the 40 to 50 year work grind and accelerating our journey towards financial freedom. Join us every Wednesday at 7 p.m. Eastern as we explore different types of investments that can best track your path to financial independence. We serve as a hub for connecting with fellow members during our sessions so you can share successes, ask questions, and keep the momentum going.

SPEAKER_01 0:27

We're gonna kick this

When Banks Say No

SPEAKER_01 0:29

thing off. And today's session is about financing properties when traditional banks say no. And those traditional banks could be the bank that you've been with forever, the Bank of America's of the world, the Chase Banks of the World. Back before I really got deep into real estate, I used to think that those are the banks that you would go to to get financing. And I have learned very quickly that that's not who you want to go to. I much more favor mortgage brokers that work with a lot of banks and or credit unions that may be attached to your workplace or that you bank with locally. I think those are some of the best ones you can go with in terms of financing terms and actually looking out for each other. Now, most people think that a no from a conventional bank, like one of the ones I just mentioned, means that the deal is dead. I'm here to tell you that it's not. Banks are one lane on a multi-lane highway. And tonight we're gonna walk through five financing paths that don't depend on conventional approval to get done. And so the five we're gonna talk about today are DSCR, hard money, seller financing, subject to, and partnerships in private money. And I have actually done a good portion of these and helped clients do at least all of these, actually. And so this is gonna be a good talk

DSCR Loans For Buy And Hold

SPEAKER_01 1:42

to walk through this. And so first we're gonna dive into DSCR loans. And so DSCR is the debt service coverage ratio loan. And it's something that is very familiar when it comes to commercial projects, right? So if you're buying something that's five plus units, or you're buying something that is like a retail operation or storage or things of that nature, this is typically the type of loan they're looking at because they know if you're gonna go buy a whole storage facility, you're not gonna be the one that can cover that. That's they're not gonna look at your W-2 as like, hey, can you pay for this thing over time? They're gonna look at your overall debt service coverage ratio, right? For hey, how much income is this property bringing in? Or what is the projected income that this property is gonna bring in? And can it cover the mortgage plus sum? Typically, they want to see a minimum of 1.2 coverage, meaning if the mortgage is a one, it's 0.2 over covering the mortgage. So you have a little wiggle room there, but they're definitely gonna want to see some reserves as well on that piece. Now, when it comes to DSCR loans, especially in the residential space, they've gotten popular over the past few years. This does not mean that you can just have any type of credit and get a good DSCR loan. Ideally, you want to have at minimum a 620. Ideally, a 680 or 700 plus will get you into better DSCR loans because there's some where it's a DSCR loan, but you got to put down 25%. And there's others where if you get excellent credit, you can put down as little as 15%, depending on the type of property you're buying, with that debt service coverage ratio loan. And so that's the DSCR for buy and hold investors who don't show enough personal income on paper. This is a good one. And so myself, right, I have now moved into the 1099 world and I tend to write a lot of stuff off. That's one of the benefits of being a full-on real estate investor, right? And so DSCR loans as well as bank statement loans have been what I've uh leaned into over the most recent couple of years.

Hard Money For Flips And BRRRR

SPEAKER_01 3:28

Number two, hard money. So this is really based on the asset itself. They don't look at you too much, except if you have a history of working with your hands or being able to handle these type of flips, that's gonna help you on this. When it comes to hard money, you're gonna put down a little bit more than you expect. People think that, hey, I'm just gonna get all the money from this investor. No, that investor needs to protect themselves as well. So typically, especially if it's your first hard money deal where you're doing like a flip or a burr, and that's what this is used for, right? And let me take a step back. When you're doing a flip or a burr where you know it's gonna be a short time period of like six months or so, that's when hard money comes in. I've had some newbies come to me and say, Hey, I'm thinking of buying, you know, a portfolio of properties that I want to just make long-term rentals, they're already renovated, and I wanted to use a hard money loan to get it. That is not ideal because a hard money loan is not supposed to be held for a long time. If interest rates right now for a convention and conventional investor at like are at like seven and a half percent, a hard money loan is going to be anywhere from 12 to 15 percent, and it's gonna have a time limit on it before you have to start paying penalties and other points, and you got to pay points up front. It's just a very expensive loan. What it's used for is to get in and get out, typically on a flip project or a Burr project where you can refinance it in a short time period. I'd say that time period is ideally six months or less, or maximum a year on a hard money loan. But when you talk about using it, it's great for homes that would not qualify conventionally. It's great for a house that we just helped the client do. We just helped the client do a Burr stir, which is a buy, rehab, rent, refinance into an STR for a luxury str. And this house is fire. When we run the numbers up front, we were able to get the house purchased before 50, even though it was listed at like 550. We got it at 500, negotiated down to 450 during due diligence. And I had the comps coming back at around the 850 range. If we put 200k into it and we were good with that, they did a little bit more, they probably put like 250, maybe like 275 into it to do even more features. And this home came back not at 850, but at 1.15 million. And so they successfully completed the burr, pulled their money out, and now have powder that's dry to use on the next deal. And they did an excellent job on this property, and now they got basically a brand new property. And so that's an excellent use of the hard money where you're able to refinance and do it into a burr, and that's what you would use it for because they give you not only the down payment or the rest of the down payment, because you're putting down 20%, they give you the rest, and they give you draws to actually do the full fix-up.

Seller Financing In A High Rate Market

SPEAKER_01 5:57

Okay, number three, seller financing. This is something that's a huge buzzword. I know that there's a lot of teachings out there that show people how to do seller financing. And one that comes to mind is like the pace morbies of the world, right? Where they have like the subject to and things of that nature, which we'll get to, but seller financing is really valuable when the seller owns the property outright and when you're in an environment like we are in right now. A lot of sellers still believe their home is, you know, hey, it's at the value that it peaked at back in 2022, and they're not willing to come off of the price. And if they own most of it or own it outright, they don't have a lot of pressure to you. They could just wait this thing out. And so this is where seller financing can come into play. If you come to them with an offer and say, hey, I'll put X amount for a down payment, as long as you finance the rest, you can make a deal happen in this environment, and you can make a deal happen to where it's not gonna hit you as much as going out and obtaining a loan right now. Because right now, if you were to go get, you know, a conventional loan, you're looking at seven and a half percent roughly for an investment loan, and and that's pretty high, right? And so, well, compared to what we're normally used to. And so with seller financing, you get something as low as like three percent, four percent. It's really whatever you negotiate with the seller. Now, the caveat with this is it depends on how sophisticated the seller is what they're gonna negotiate. Typically, you'll get a lower interest rate. Sellers are gonna want to negotiate a higher down payment because they want to get some cash right now. That's why they wanted to sell this whole thing, and so have a conversation with them on that. And then the term that I usually try to get is based on where we are in the market, I would try to get about 36 months to 60 months of where you can just pay on that seller financing note, right? And at any time during that, at no penalty, you can refinance and go and get a loan from the bank and wipe out the rest of the seller finance. This is one way to do it. We actually were contemplating doing that on the storage property that we purchased, and the seller was open to it. They just were pretty sophisticated and they were older and they were asking for like seven percent. And we're like, no, we're not doing that. Uh, and so in interest. And so we ended up just going to the bank and getting like, you know, a comparable loan to just get them out of it and have full control. So that's seller financing, which is number three.

Subject To Deals And Trust

SPEAKER_01 7:59

Number four, right? Four of five is subject to financing. And this is when the seller still has a significant uh loan on the property, right? But they're trying to sell it and they're not getting the number that they're looking for. Ideally, it works if that seller just wants to get out of the deal, right? They're a little more open to go on this pathway, or if they have equity in the deal and they trust you to be able to execute on this. And so I actually have completed one of these myself. I did it back in 2024, and it was with a short-term rental that we were already managing. This owner had bought a bunch of properties to flip. And as we know, uh the market kind of turned uh back in 2023 when interest rates were so high and it started to really drive down values. And this was in a fringe neighborhood, it wasn't an A or a B plus neighborhood where the values would stay up, it was something like a C plus area where the values really fluctuate, especially when the market starts to get a little bit shaky because people aren't banging down the door to be in that neighborhood. And so the numbers were basically break even for him. And when there were fixes that came in that came out of his pocket, because he was paying us the 20% management fee to be fully hands-off. And so when you look at that piece, he was fully hands-off, right? And that was awesome, but he wasn't making any money. And anytime something happened, it was like, okay, this is more money out of pocket, more money out of pocket, more money out of pocket. And so what we ended up doing is we did a subject to deal with him because he had it on the market for close to a year. Like he tried to list it himself because he's licensed in a different state. We said, you know what? I'm gonna save on the cash and just list it myself. So he did that. And long story short, it sat and he wasn't willing to take less. And so we were open to giving him his asking price if he gave us the terms. And so essentially, we were able to get in this fully furnished, no down payment, right? We just took over the payments, and then that management fee became our profit. And we put probably another six to eight grand into the property itself because he wasn't willing to do this, but there were some updates that could be made to just make it stand out a little bit more. But it was a three-bed, two-bath property, which is not something we would go and buy on the market, right? We absolutely would not. Ideally, in the Metro Valencia, you want to go bigger or go super small and make it unique. And so we took this one over subject two because we didn't have to put any money down. We just did a couple updates and we were able to boost a bit of the cash flow. And we put it on a 36-month uh deal to where the equity that we owed him, which is probably like 50 to 60 K or so above the purchase price, above the loan that existed on the property, which we had already taken over, is what would come due in a balloon payment in 36 months. We didn't have to make any payments in between then, as long as we just paid the mortgage, and that would be a balloon payment. And so now in that 36-month time frame, we have the opportunity to figure out when the best time makes sense to either sell it or refinance it and then use those funds to pay him out, and then we have the property and kind of go from there. And so the mechanics of this are you typically have to have trust with that seller, right? Either an established relationship from before you got to follow with them a lot. They're typically not gonna do this with somebody they just met online, right? Unless you're highly convincing. But subject two is a way that you can get a couple of these projects as properties as well, and actually know a couple investors down the DMV area that this is their whole strategy. They went through a couple camps and they crushed the subject two.

Partnerships And Private Money

SPEAKER_01 11:06

And the fifth and final one that we're gonna go over today is partnerships and private money. Okay, so I've actually done both of these as well. When it comes to the partnerships, right, there's many things that you can do in real estate, and with the partnerships, your partner could either help you bring capital, they can bring the operations expertise, they can bring the credit to the partnership. It really depends on what you need. And so, one of the properties I purchased, it was my second deal actually in 2018, is I bought a 12 unit, right, which is a commercial loan. It was actually three quadplexes that were right next to each other, and this was down the block from the first triplex that I bought. Like literally, you could take, you know, a two-minute walk, boom, boom, maybe three houses down, and you'd hit all these houses, uh, these quadplexes. And it was for 500k because these things needed some work, right? I perched it and immediately had to put in close to 30k of work in replacing roofs, doing structural updates. The crawl space was super tight. It was like 24-inch crawl space and it was supposed to be a lot bigger. And so guys had to go in and dig it out, redo some structure, put vapor barriers down, get mold out of there uh that was starting to seep into the living spaces and get it going. So that's why I was being sold for that. But long story short, I didn't have the down payment at the time. I thought I had some deals that were coming in, but they just kept getting delayed. And so I actually partnered with a family member who brought the capital, the at least a good portion of the capital. I combined with that, and we were able to purchase this deal and we're off to the races to kind of make it happen from there. And so this is one of those pieces that that we work through, right? That you kind of can work through from a partnership standpoint. There's many different ways to structure it. Now I have partnerships on the storage, right? Where it's if you know it's an even partnership where we're both bringing the money, both bringing the expertise and kind of making that piece happen. And I do partnerships across the board. I love partnerships, I treat partnerships like a marriage. You really need to know and trust that person, like and trust. It can't just be something that you do willy-nilly, like, hey, you know, this is my friend from grade school, I haven't talked to in a while. But back then he seemed like a good guy. Let's go ahead and partner. No, you need to understand how each is going to act. And I'd recommend taking it a step further and jumping on a call with partnership attorney or somebody who's going to work on the operating agreement, the LLC, and have them ask you guys the questions that need to be answered, right? Almost like going to premarital counseling. Highly recommended. You want to get these things out of the way up front, as opposed to coming back later and having missed expectations turn into a lost friendship. And then finally, the private money piece. This is one where if you have the deal, right, that you're looking for and it's one that you need the funds to make it happen, you absolutely can just go for a private money deal. And this is where you can offer that person maybe a better return on their money than the market can do. And so we had the townhome project going on the Louvre, and this was essentially what we're going for. It's like a partnership, but it really was private money up front to be able to actually get this thing going and build it from the ground up. And you can do this in many different formats. But if you have somebody in your network that has money sitting on the side that they're looking to put to work, a private money deal could help. I've actually lended on a lot of deals, private money where I didn't have equity, and the return that I was getting was, you know, 15, 20, 10. And I was like, okay, as long as the return is higher than what I'm getting in the market right now, I'm good with it. And what I was using to lend on my private money deals for others was a HELOC. And the HELOC, I think at the time was at like six or seven percent. And so I just wanted to make a certain premium over that, call it 10, right? And if I was making 10 over that, I'd just pull the HELOC, give the private money, and then get the money back, pay off the HELOC, and boom, we're off to the races. And I just made money on essentially borrowed money, which is kind of cool. And so those are the five that we're gonna talk about.

Consult Link And Weekly Schedule

SPEAKER_01 14:41

Again, if you want to talk about any of these live, feel free to go ahead and go to akabahome.com and book a consult on the Akaaba Home Teams calendar. I appreciate everyone who joined live as well as those that are gonna join in the future to look at it. And I hope everybody has an awesome Wednesday.

SPEAKER_00 14:56

Join us every Wednesday at 7 p.m. Eastern as we explore different types of investments that can fast-track your path to financial independence.