The vast majority of real estate information on the web is utterly useless to Australian investors. The American market is drastically different to the local market, in particular with the way people set up finance.

Here in Australia, when people want to buy a house they go to a bank or non-bank lender and ask for a mortgage. This does happen in America, but you will find the vast majority of American sites deal with private mortgages, or "notes".

"Creative finance" is how many American real estate gurus teach real estate investment. "Creative" doesn't necessarily mean it is a wonderful idea. This is the same usage of the word as the practice of fudging the books to fool investors or the tax man - "creative accounting". I have scoured the web for good real estate sites but there are practically none. America has those shonky investment gurus that advertise on late night television as well, but over there they absolutely dominate the real estate advice market. You will find practically nothing of value on any of their sites as far as advice on what sort of property to invest in, or what they think about the real estate cycle or anything else. All you will find are web sites that teach you how to write up your own mortgage documents in such a way as to disadvantage those that you deal with.

Elsewhere in this FAQ I talk about the time value of money, one million dollars today is always going to be more valuable than a dollar a year for a million years but many of these creative strategies focus on convincing some old lady that a note is worth only face value, allowing them to set terrible and long terms. The vast majority of the advice given tells you how to deceive people into thinking that a mortgage document is worth its face value when they have something to sell you, and for those they are selling to to accept less than favourable terms.

The methods are very dishonest, instead of relying on good investment practice, they focus on ripping people off and often lying to other lenders. Zero-down finance is a popular topic on American web sites, but this basically involves lying to lenders about who is receiving the money and what assets you have. 'Techniques' like getting someone you know with a better credit rating to apply for the loan and taking the loan over yourself. This is totally illegal, for good reasons, but the gurus insist that it is legitimate and ethical if it is done "correctly". They also justify such deception against lenders by insisting that lenders who try to limit their risk by insisting on such things as borrowers being able to comfortably service their debts are being "greedy".

The whole industry is full of people who specialise in using dishonest methods for getting discounts on houses (like having a "contractor" associate of yours give inflated quotes on repair costs, psychological techniques for getting some guy who may be in financial difficulties to accept a very bad offer or otherwise pressuring people to sell to you at less than market value).

They basically specialise in dishonesty. Ripping off sellers, lying to lenders, convincing buyers to agree to outrageous terms, lease options that are created with the explicit goal of selling a dream to someone with bad credit who can't get loans the idea that they can get in through a back door - but writing the lease option in such a way that the buyer is likely to default, thus leaving a person who could not afford their own home even less likely to afford their own home.

These gurus focus purely on how to get people to agree to terrible terms from you, saying nothing about the actual investment. They generally tell you how to obtain property but don't say anything about what sort of property or when. The assumption is that the only problem people have is not having the money to buy lots of houses. The solution is to cheat your way into owning places and the idea is that ownership itself is enough to guarantee wealth. Some of the techniques work, in a selfish and greedy kind of morally reprehensible way, but most are unsound investment plans, that leave you with ownership of a house, but strongly negative cash flow. Frequently you end up paying too much interest from the few lenders willing to go along with these plans, assuming you are able to go unnoticed by the authorities who regard much of this as illegal behaviour.

The tax system is different there. The types of property people buy there are very different. Private mortgages are much more common. A number of different purchase options are available there that won't work here. Most of what is on the web sites is illegal in Australia, and has sent a fair few Americans to jail as well. I like John Reed's site, but mainly because he has a lot of nasty things to say about other real estate gurus in America, so it is a valuable resource for spotting frauds.

Unfortunately there isn't much else on the web that is any good for Australian sites either. I researched this FAQ entirely from books, experience, academic papers and interviews with successful property investors.  Although I did search the web I found nothing that was the least bit helpful.