"What we've gone through in the last several years has caused some people to question 'Can we trust Microsoft?'"Steve Ballmer
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Real Estate Marketing for the “You” Generation
Are you working in the real estate industry? Are you a real estate agent, mortgage consultant, builder, real estate broker, appraiser, construction worker, etc? The Internet is the wave of the future. You can no longer sell homes without at least some ...
Selling a Real Estate Note, Is your Real Estate Note Saleable?
As a Premium real estate note buyer I am often asked by note sellers if their note is saleable. I can't stress enough to sellers how important it is to get the right information about your note and payment history to the potential note buyer. The ...
With US Marketing Cooling, Real Estate Investors Should Look To The Caribbean
While last few years have seen an unprecedented expansion in US real estate markets, recent signs suggest that the air is beginning to leak out of the property bubble. Mortgage rates are rising and the average time to sell a home is increasing as ...
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Here's a way to profit from real estate with no money out of your pocket that's a winner for everyone involved.
Find a vacant residential property that needs work. Instead of tying up your money buying it and dealing with the hassle of contracting the work (or spending all your spare time on it), tell the owner you'll lease it at 25% below market rent for a certain period of time, with an option to buy it at the end of that time, also at a percentage below market. If the property is the probable headache to a long-distance owner that seems likely, he may take you up on it.
Then, put a pulls-no-punches classified ad in the paper. It could be along the lines of "El Dumpo! Rent-to-Own, $0 down, You fix, 555-1243." You will get calls; screen the caller's background to see if he can actually do the work that's needed. Tell him you'll charge him market rent, but will not let the person move in until the work is completed, because the work won't get done otherwise. At the completion of work, his payments will be deducted from the sales price, which will also be at market.
It's a win/win/win; the new buyer gets in with only his sweat as equity, the original owner gets to unload a headache, and you get the difference between the percentage below and the market rate for taking the initiative and overseeing the deal.
A money-saving note: When the work is completed and the new buyer is ready to take ownership, sell him your option, and let the paperwork reflect that he bought directly from the original owner. This will avoid the expense and hassle of 2 closings, as well as a potential capital gains hit for you if you'd held the option for more than a year.
This is just another way to invest in real estate with no money down of your own. It's a good creative exercise, and a profitable example. But, when you're thinking this way, remember that you don't want to put yourself in a situation where you make foolish choices for lack of cash flow--like renting to a lousy tenant or making cheap repairs to a property. Both will cost you more than they're worth in the long run. Be creative because it's your strategy, not out of necessity, so you're never tempted to be penny wise and pound foolish.
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