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How To Buy and Sell Florida Properties with Creative Financing

Nov 01 2023

Most mortgage lending institutions have stringent rules and qualifications surrounding who is approved for funding. This means a large portion of the population is excluded from the dream of homeownership. If this sounds like you, there’s good news for your funding attempts. Creative financing is becoming a popular way to purchase a Florida property. It is also a method by which investors can purchase properties in Florida, and another arsenal in their toolbelt besides wholesaling and rehabbing properties.

The below non-traditional methods of purchasing and financing properties offer more options for buyers and sellers in today’s low inventory and high interest rate real estate market. Some of the more popular options are owner financing (a/k/a seller financing), lease-to-own, subject-to transactions, novations, and hard money/private loans.

Owner Financing

As one of the more well-known creative financing methods, owner financing (a/k/a seller financing) is popular amongst buyers looking for alternative funding. In this arrangement, the seller agrees to accept a down payment and monthly recurring payments from the buyer. The seller in turn receives a mortgage from the buyer to secure the debt. Instead of paying a mortgage company regularly, the buyer pays the seller an agreed-upon amount. Seller financing offers a faster closing process, less fees, and more flexible financing terms. It also often involves lower interest rates than traditional loans.

Lease Option and Lease-to-Own

Among the creative financing options, lease-to-own or rent-to-own arrangements are also relatively common. They allow a would-be buyer to rent the property for a specified period of time with the possibility of purchasing it later on. With lease-to-own agreements, the tenant makes a commitment to buy the home after their rental period expires. The buyer’s rent payments also go toward the down payment if they end up purchasing the property.

With a lease option, the tenant has the option to buy the property during a specified time period and for a predetermined price. A separate option fee must be paid for the option to be valid.

Subject-To Transactions

Florida properties bought subject-to are more frequently seen in investor purchases, but this option also benefits other types of buyers. With subject-to financing, the buyer takes over the seller’s mortgage payments. Nothing is changed with regard to the seller’s mortgage loan, and no new contract is entered into with the lender. The buyer simply makes the payments on behalf of the seller and takes over as the owner of the property. The seller may also receive a fee at closing for transferring title to the buyer. Subject-to transactions must be structured properly to avoid the mortgage’s due on sale clause.

Subject-to transactions are becoming increasingly popular due to the hike in mortgage interest rates. Buyers can take advantage of the lower rates that sellers have secured in years past. Sellers who are in a difficult financial situation find this strategy to be helpful for them to avoid foreclosure while still putting some money in their pockets.

Hard Money Loans and Private Financing

As an asset-based financing option, a hard money or private money loan is most commonly seen when short-term options are preferred. House flippers gravitate toward private money lenders, but potential buyers with low credit scores could also find this option appealing. Florida property buyers who are in a hurry to secure a home may prefer a hard money loan or private financing because of the shorter turnaround time for receiving funds.


A novation occurs in Florida property transactions when one contract or agreement is replaced with a new one. It sounds relatively straightforward, but there are multiple types of novations. A standard novation involves two parties who agree to create a new contract. An expromissio novation exists when there is a third party involved.

In Florida, novations are typically used by investors who enter into a contract with a seller and then find a buyer to replace the investor and ultimately purchase the property. The investor will receive a novation fee once the expenses from the sale are paid.

How Marina Title Can Help

Not every option will work for every homebuyer, seller, or investor – Marina Title is here to help assist you to determine if creative financing is an option for you.

We provide title, closing and escrow services throughout the State of Florida. We are also an investor friendly title company and work with investors of all types to help their deals close successfully.

For more information about our title and investor services or to get started, please call us at (800) 604-1871 or send an email to

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