Why Creative Financing Matters Right Now in Bend
Conventional mortgage rates have pushed past 7% for investors in 2026. At current prices and current rates, most Bend rental properties simply do not cash flow on a traditional loan unless you put a significant amount of money down. That math is pushing serious investors to look at deals differently — not at different markets, but at different structures right here in Central Oregon.
As Suzanne Moore, founder of the Central Oregon Investor Network and a licensed Oregon Realtor, puts it:
Some of the best deals that we have been a part of did not get financed by a traditional bank. That is exactly what creative financing is made for.
Below is a plain breakdown of the four main creative financing tools, when each one makes sense, and what risks to keep in mind before you move forward.
Seller Financing: The Seller Becomes the Bank
With seller financing, the seller holds the note and you make monthly payments directly to them under agreed-upon terms. The appeal right now is straightforward: many sellers are sitting on mortgages at 3%, 4%, or 5%. Rather than letting a bank collect the spread between their rate and today's market rate, a seller can earn that difference themselves by financing the sale.
For buyers, qualifying is far less burdensome than going through a traditional lender. A seller will typically want to see your credit score, proof of funds for a down payment, and possibly a tax return or proof of income. There is no lengthy underwriting process, and closing costs are considerably lower because most of what you pay at a conventional closing goes to the lender.
A few things to do this right:
- Have a real estate attorney draft a properly written promissory note and deed of trust or mortgage. Do not rely on a handshake.
- Decide on the structure — a land sale contract where the deed stays in the seller's name until obligations are met, or a full deed transfer with the mortgage recorded in the buyer's name.
- Consider using a note collection or escrow company to handle payments. The buyer pays the escrow company, the escrow company pays the seller, and year-end tax reporting stays clean for both parties.
Subject-To Financing: Taking Over an Existing Mortgage
A subject-to purchase means you take over the payments on the seller's existing mortgage. The title transfers into your name, but the original loan stays in place in the seller's name. This is how you can end up with a 3% or 4% mortgage in 2026.
Sellers who go this route are often motivated by speed or circumstances — they may be distressed, need to relocate quickly, or simply want a clean exit without listing on the open market. Most subject-to deals are off-market, though not all.
The primary risk to understand is the due-on-sale clause. Nearly all conventional loan documents include language that allows the lender to call the full balance due when the property changes hands. This risk is real and manageable, but it requires proper legal paperwork. Get a real estate attorney involved before you close on any subject-to deal.
Lease Options: Control the Property Before You Own It
A lease option — sometimes called rent-to-own — lets you control a property as a tenant-buyer and lock in a purchase price today, with the right to buy within a set timeframe. You pay an option fee upfront, which typically counts toward the eventual purchase price, and monthly payments similar to rent, with a portion sometimes applied to the principal.
Until you exercise your option to buy, you are a tenant. That said, lease option tenant-buyers are generally responsible for taxes, insurance, maintenance, and repairs — more like an owner than a traditional renter.
This structure gives a buyer flexibility, particularly if there is any chance that rates drop before the option period ends. It also works from the seller's side: Sarah Willis, Suzanne's business partner, lease optioned a Bend property that was originally intended as a flip after determining it was a stronger deal structured that way.
Private and Hard Money: A Fast Bridge to Conventional Financing
Private and hard money lenders can close in as little as 24 hours to a week. There is minimal underwriting, properties are typically not subject to appraisal, and these loans are often treated like cash in competitive situations. That speed matters when you are competing for a property that will not last on the market.
The trade-off is cost. Current private and hard money rates run roughly between 10% and 18%, and lenders may charge origination fees of two to three points upfront. This is not long-term financing — plan to use it for six to twelve months and then refinance into conventional terms.
Common reasons investors use this bridge:
- The property needs repairs and does not qualify for conventional financing.
- Speed is essential and a 30-day conventional close is too slow.
- The buyer does not currently qualify for traditional underwriting.
Who These Tools Are Built For
Self-employed investors who use the tax code to their advantage often look like they earn very little on paper. Recent job changes, a lower credit score, or a property with physical issues can all disqualify a deal from conventional lending. Creative financing exists precisely for those situations. In Bend specifically, it is also one of the only ways to make a rental property cash flow at today's prices without an outsized down payment.
Work With People Who Know This Market
Creative financing structures require proper legal documentation. COIN has local real estate attorney connections to help you get paperwork drafted correctly and protect your investment from the start.
If you want to go deeper on private money — including how to find it, structure it, and use it to build your portfolio — check out the PRIMO Private Money Academy. And if you want to connect with other Central Oregon investors who are actively using these tools, join us at the monthly COIN investor meetup in Bend. Details are on the COIN website.
