Brad Smotherman's Insights Into Creative Real Estate Investing

Quick Summary: This real estate investor has created a multi-seven-figure house flipping business and is one of the top owner-financing gurus in the country. He combines quick-turnaround flips for immediate cash flow with owner-financed and subject-to deals for long-term passive income. Investors who use his methodology tend to target constant lead generation, flexible deal structuring and funding that doesn’t require a bank’s clearance. This is how the strategy works, why it is attractive for new investors and how to start using it. 

Who is the investor behind this owner-financing model?

Real estate investing used to be all about banks, credit ratings and hard loan qualifications. That strategy works well when borrowing rates are low and buyers have good credit, but it excludes those looking to develop wealth through property and don’t want or can’t go through a traditional lender. Creative finance investors have established entire businesses on that gap.

Brad Smotherman is a real estate investor, coach and podcast host with over 20 years of experience in creative finance. He is considered one of the top owner finance experts in the country, having deals in around 16 states. He has a big portfolio of owner-financed notes, largely in Middle Tennessee, and also runs a busy flipping business that makes seven figures a year.

His strategy is not merely distinctive for the volume of deals. It's the skeleton. The concept is to run both flips and owner financing simultaneously rather than as distinct businesses. Short-term flips create quick capital, and owner-financed exits generate long-term, recurring income. This blend is the core of what this article calls creative real estate investing. 

What is creative real estate investing?

Creative real estate investing means buying or selling property using structures other than a standard bank mortgage. Instead of a buyer walking into a bank for a 30-year fixed loan, the deal is structured directly between buyer and seller, or between an investor and a homeowner. Common creative finance strategies include:

• Owner financing (seller financing): the seller acts as the bank and collects monthly payments directly from the buyer instead of a lump sum at closing.
• Subject-to deals: an investor takes over a property's existing mortgage payments without formally assuming the loan, gaining control of the asset without new financing.
• Wrap-around mortgages (wrap notes): a new loan wraps around an existing mortgage, letting the seller profit on the difference between the original loan rate and the new financing terms.
• Lease-options: a tenant leases a property with the right, but not the obligation, to buy it later, often at a price agreed on up front.

These structures matter because they open the market to buyers who can't qualify for conventional financing, and they let sellers close faster, often without repairs, agent commissions, or long underwriting delays.

How does the flip-and-finance business model work?

This technique is applied to two engines simultaneously.

Engine one is short term flipping. Properties are purchased, typically off market below market value through direct marketing to distressed/motivated sellers, and then rehabilitated and sold on the retail market. That provides the working cash to finance day-to-day operations and prospective acquisitions.

Two Seller-financed notes. Some are sold with owner financing rather than selling each property that is remodelled or bought. The investor is the lender, collecting a down payment, then monthly principal-and-interest payments over time, at a markup over what they still owe, or with no underlying loan at all.

This two-engine approach overcomes a typical difficulty in real estate investing: flipping alone requires ongoing deal flow to sustain income, and owner financing alone grows slowly. Together they support one another. The flips provide liquidity and the notes continue to pay out for years after each sale closes.

Why do new investors use this approach?

New investors are typically drawn to creative finance for three reasons:

1. Lower capital requirements. Owner-financed and subject-to deals often require little to no traditional financing, making them accessible to investors without much cash or a strong credit history.
2. Faster deal velocity. Skipping conventional mortgage underwriting can shorten the time between offer and closing significantly.
3. Recurring income potential. Notes created through owner financing can produce monthly cash flow for years, similar to a private mortgage-backed income stream.

Students who have been through this sort of programme often say they’ve gone from no real estate experience to closing their first deal in months after studying direct to seller marketing, deal analysis and innovative structuring. This way the model can be trained, not only used by one operator. 

Frequently asked questions

What is Brad Smotherman known for in real estate? 

He is known for building a multi-seven-figure house flipping business while also being widely considered one of the top owner-financing experts in the country, with deals closed across roughly 16 states.

Is owner financing legal and safe for both buyers and sellers? 

Yes. Owner financing is a legal transaction structure used across the U.S., though it must comply with state-specific real estate and lending regulations, including the Dodd-Frank Act's rules on owner-occupant financing. Both parties typically use a promissory note and a deed of trust or mortgage to protect their interests, and working with a real estate attorney or title company is strongly recommended.

Can beginners really start with creative financing instead of flipping? 

Yes. Many creative finance investors start with little capital by focusing on subject-to or owner-financed acquisitions, where the seller's existing terms, or new seller-financed terms, reduce the need for a large down payment or bank qualification.

What's the difference between flipping and owner financing as an exit strategy? 

Flipping sells a property for a lump sum shortly after renovation, generating fast, one-time profit. Owner financing sells the property over time through monthly payments, generating smaller but recurring income plus interest, which can add up to more than a cash sale over the life of the note.

How many deals or states has this model been used in? 

The business built around this approach has reportedly closed hundreds of transactions across roughly 16 states, with an active note portfolio concentrated in Middle Tennessee.

Key takeaways for aspiring creative investors

• Creative real estate investing isn't a single tactic. It's a system combining short-term flips for cash and long-term owner financing for recurring income.
• Owner financing, subject-to deals, and wrap mortgages let investors close deals without relying entirely on conventional bank underwriting.
• A two-engine business model, flipping now and financing later, helps solve the cash-flow problem that limits many single-strategy investors.
• Education and mentorship, direct-to-seller marketing, and disciplined deal analysis are consistently cited as what separates investors who scale from those who stall.
• Legal structure matters: promissory notes, deeds of trust, and compliance with lending regulations should be part of any owner-financed transaction.

Final thoughts

Creative real estate investing addresses two issues simultaneously: it provides purchasers an alternative to traditional banks for property ownership, and it enables investors to earn short- and long-term income from the same transactions. For investors who desire a little more flexibility than a bank-dependent plan, flipping for cash today and producing owner-financed notes for income tomorrow is a viable option. That’s a good place to start for anyone developing a creative investing business to understand how the two elements go together (flipping + owner financing).