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Hi this is Chad Carson in this video Want to talk about why it's actually important that we learn about creative financing and I assume if you'rewatching this video and taking this class that you already have that you already see the benefits, and you already know why it's important, but I don't want to take that for granted and so in this video IN#39’m going to go over a couple of things I think I can tackle this question by first talking about why not use banks why not just go tithe bank and get a loan as a real estate investor and then IN#39’m going to go into why's it better in my opinion to use or depend more on creative financing sole#39’s start off with the question of Weldon#39’t you just use banks you Knopf you're if you have good credit if you had a big down payment you know banks are in the business of loaning money so why not just go there to get a loan torn your real estate investing business and I have a few reasons why I thinkthat'’s not not the best idea anthem firsts is it talked about the real estate cycles real estate is a very, very cyclical business as are most businesses but in particular real estate has tendency to go in about seven to 10-yearperiods where the market goes up and the market goes down and this is usually correlated with on the down cycles there are a lot of foreclosures the prices do soften up you know in the extreme cases like the Great Depression when prices plummeted by 90% in many cases or more of what they were before the real estate crash and then the greatest Recession they called it and not2008 and those few years after and so that the phenomenon though that is important to think about with banks is that yes banks are a wonderful place Togo get money and IN#39’m not going to totally bash going to the bank to get money I've used banks a lot in my own business IN#39’ve just used creative financing a lot more and one of those reasons is that during the down cycle when in real estate you get Thebes deals when you have the lowest prices when the income to price ratios are the best during those down cycles those are buying time that#39’s when Warren Buffett says when everybody else is fearful that's when you're supposed to be greedy that's when you're supposed Togo out and buy deals or the problem isbanksor tend to tighten up their money supply they don't give out as many loans during those down cycles and when did I give the most loans during the up cycle when you have the least motivation of thereal-estate investor there the fewer good long-term deals and good income deals to buy it the upturn that#39’s when they're learning more money and many of these bubbles are even created in some cases by a lot of a glut of financing on the market so that that's just part of the cycle and so if you're totally dependent on your business on bank loan son bank financing you're going to have different more difficult time taking advantage of one of the most important fundamentals of the real estate markets that#39’s...
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