Master Creative Financing: Gary Chefetz’s Secrets to Closing Deals

Erika (00:00.841)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Gary Chefetz, who’s been making waves in the real estate space and has mastered creative financing. Gary, I’m so glad to have you here today.

Gary Chefetz (00:19.662)
Well, I’m pleased to be here, Eric. Thank you very much for the opportunity.

Erika (00:25.373)
Yeah, so for those who aren’t that familiar with you, can you give us a quick rundown? What are you doing these days and what inspired your book?

Gary Chefetz (00:36.546)
Well, I’ve been a part of the sub 2 community pace Morbys community since it started five years ago and I am a licensed real estate agent and I’ve done creative financing for most of my real estate career and I thought it was time that the.

real estate agents had access to the same knowledge that investors have access to.

And so that’s why I wrote the book.

Erika (01:14.751)
So when it comes to the strategies that you have, what’s been key to making things work well in the market? know, lot of people have challenges with cash flow, for example.

Gary Chefetz (01:26.508)
Well, all types of seller financing can really make a difference in a deal from subject two to hybrids that include seller carry back or even just seller carry back, purchase option agreements, and other structural deal structures that can make, take a deal from no to yes.

Erika (01:52.757)
Speaking of no to yes, every real estate expert has had a moment where things got intense. Maybe a deal that went sideways or you had the pivot fast. Can you share one those moments on your journey?

Gary Chefetz (02:07.37)
Well, a lot of I work with investors primarily and the first thing I do when they bring me a deal is I underwrite it. I give it a sniff check and some days I’m a real deal killer and I hate to be the one to say don’t do this but

I think that’s one of the more valuable things I bring to the table is I’ll tell a client, an investor client, no, you’re going down the wrong path. Especially in the subject two world, and I hope people listening to this podcast know what subject two means, but let’s just back up and tell them that we’re talking about keeping the existing financing in place, where you take over the seller’s loan

but you’re not telling the bank. Now a lot of people say, whoa, whoa, wait, that’s illegal. No, it’s not illegal. There is almost every modern mortgage and security instrument has a clause in it that says if you sell or alienate any part of the title in any way, the bank has a right but not an obligation.

to call the loan due or accelerate the balance. And there are different types of loans out there. Some are very risky for an exercise like that and others not so much. So the first thing I do is look at the security instrument for the existing mortgages or deeds of trust and evaluate against the secret of the…

levels of risk and you know, there are different levels of risk for each one and if it’s a highly risky loan, let’s say it’s a hard money loan and the investor hasn’t looked hard enough to see that, hey wait, this is a hard money loan, it’s come and due in two years anyway, you really shouldn’t even be thinking about this. Another example in California, we have the CalVet program.

Gary Chefetz (04:22.466)
The CalVet is like VA loan only state funded and state guaranteed by the CalVet program. And these are all structured as installment sale purchases. In other words, executory contracts. Not something you can take subject to. You’re not taking the title it hasn’t transferred. So those loans have to be paid off in order for the title to transfer.

So does that give you kind of an idea of what I’m talking about?

Erika (04:55.327)
Yeah, yeah, that’s very helpful for our listeners. You had also mentioned earlier about Pace Morby’s group, and it sounds like you really value relationships. Can you fill us more in on how networking has helped your business?

Gary Chefetz (05:13.922)
Well, Pace has got, I don’t know, he’s probably up to about 30,000 in his extended community at this point. And when I first met Pace and he’s first starting this, I really was very taken by his vision of building community.

not a mentorship, not a course. was, yeah, we’re gonna all learn together, but building this incredible community. And I think you’re…

investor fuel as an element of that community based. So I find that very attractive. There are a lot of people out there that are selling a course or a six month mentorship and off you go. But this is a community of people that.

the core of which are continuing to interact with each other, doing deals with each other. So it’s, you know, it just, it’s changed my life, literally. The knowledge that I’ve acquired to be able to write this book, everybody, there is creative finance handbook for real estate professionals. The knowledge, the transactional knowledge that is stored in that book, couldn’t have happened without

that community because I’d simply not have the range of experience helping all of these investors get their creative deals across the line.

Erika (06:50.879)
That’s really great. Gary, I want to go back to talking about your book a bit. How do you hope your book will impact aspiring real estate investors or even seasoned pros looking to add creative financing to their toolkit?

Gary Chefetz (07:08.812)
Well, the book is valuable to investors because there is nitty gritty stuff in this book at a transactional level and talking about risk that’s valuable to anybody. But I did write it with the real estate agents and real estate brokers in mind to help them assimilate the skills necessary.

to not only understand and work with investors on creative financing deals and move their listings, but also to be able to look deeper into the deal to find solutions that they may be overlooking.

For instance, the average listing agent has no idea what the existing loans are on their listings. If you ask them, hey, I was interested in 123 Main Street. I was wondering what kind of financing is on there right now. Most of them, I don’t know.

And that means that there are facts that are not in their possession that might help them help their client. And so my goal is to try to enlighten the real estate agents and broker community to, and others as well, escrow companies, title companies, so they understand some of these constructs.

So my goal is to try to enable them to solve problems in a better way. Makes sense.

Erika (08:47.571)
Yeah, yes, absolutely. And before we wrap up, Gary, if someone wants to connect with you, learn more about your work or dive into the creative financing book, what’s the best way for them to reach out?

Gary Chefetz (09:04.204)
Well, you can email me at gary at creativefinancingbook.com. That’s one way. My cell phone number, 442-256-5879. You can find me on Facebook, my name. You can find me on Instagram, gary underscore Sheffetz. Although the quickest way is direct.

Erika (09:35.359)
So perfect, Gary. Thank you so much for your time. We need more pros like you doing things the right way, helping others, lifting others up in the industry.

Gary Chefetz (09:47.04)
It was a pleasure, Erika. Thank you so much.

Erika (09:50.719)
To everyone listening, if you got value from this episode, make sure you’re subscribed to the Real Estate Pros Show. We’ve got more experts lined up ready to have conversations about tough and interesting subjects in the industry. We’ll see you on the next episode.