Being “Creative” Doesn’t Mean Ignoring Math
Being “Creative” Doesn’t Mean Ignoring Math
Why structure can buy time—but not fix bad fundamentals
Creative finance gets talked about like magic.
As if saying “seller carry,” “Morby Method,” or “paid at closing” somehow suspends the laws of math.
It doesn’t.
Creative finance is not a substitute for fundamentals.
It’s a way to rearrange timing, risk, and capital when the fundamentals already exist.
If the math doesn’t work, creativity won’t save it.
It will only delay the moment when the deal breaks.
Let me show you what I mean using a real mixed-use deal I underwrote.
The Real Deal: Mixed-Use on White Horse Rd (Greenville, SC)
This was a 3-unit mixed-use property:
• A tire shop (commercial)
• Two residential units
• Undermarket rents
• Strong location
• Seller open to creative terms
On the surface, it looked like a perfect candidate for creative finance.
But the numbers told a more nuanced story.
In-Place Performance (Reality First)
Gross rents: ≈ $3,820/month
Monthly NOI: ≈ $2,058
(after real taxes, insurance, repairs—not optimistic guesses)
This is the number that matters.
Everything else is secondary.
Where “Creative” Entered the Picture
At normal leverage, the deal did not work.
• 60% DSCR loan → failed
• Buydowns → too expensive
• Interest-bearing seller carry → killed cash flow
So we engineered a creative structure:
The Final Capital Stack
• DSCR loan: 50% LTV
• Seller carry: 0% interest, no monthly payments
• Seller carry absorbed balance + margin
• Buyer effectively paid to buy, but only on paper
And here’s the key:
👉 The deal barely cash-flowed even then.
About $10–$15/month at acquisition.
That’s not success.
That’s survival.
What Creative Finance Actually Did Here
Creative structuring accomplished three things:
Bought time
Deferred risk
Moved pressure into the future
It did not:
• Increase NOI
• Fix weak in-place income
• Create margin
• Eliminate risk
The deal only worked because seller payments were deferred.
The math never changed.
The timing did.
This Is the Mistake Most Investors Make
They confuse structure with fundamentals.
They say:
“It works because the seller isn’t getting paid yet.”
That’s not “working.”
That’s postponing reality.
If the deal can’t support both debts eventually, the problem still exists. It’s just hidden.
Creative finance is time arbitrage, not value creation.
The Rule I Use on Every Creative Deal
Before I ever get excited about structure, I answer this:
Does the deal work after the creativity expires?
That means:
• After seller payments start
• After balloons come due
• After refi assumptions are tested
• After one tenant leaves
If the answer is “only if everything goes right,” I pass.
Because creativity doesn’t remove risk.
It redistributes it.
When Creative Finance Does Work
Creative finance is powerful when the math already exists and you’re simply:
• Bridging timing gaps
• Managing rate cycles
• Avoiding forced sales
• Preserving optionality
In the White Horse deal, creativity made the deal possible—but only because there was a clear rent-optimization path and a realistic exit strategy.
Without that?
It would have been a slow-motion failure.
Structure Beats Rate — But Math Beats Everything
I love creative finance.
But I don’t use it to:
• Justify bad entry prices
• Ignore thin NOI
• Force leverage
• Sell myself a story
If the numbers don’t work, creativity won’t save the deal.
It will just delay the lesson.
How I Help Investors Avoid This Trap
A big part of my work is helping investors separate real structure from fake safety.
That includes:
• Stress-testing capital stacks
• Modeling post-balloon reality
• Engineering seller financing that buys time without hiding risk
• Deciding when to walk away—even from “cool” creative deals
If you want help structuring deals the right way—or knowing when creativity is actually making things worse—you can see how I work here:
👉 https://chadchoquette.com/how-i-work
👉 https://chadchoquette.com/deal-structure-services
Creative finance is a tool.
Math is the law.
Ignore the law, and the tool will eventually break in your hands.
