Creativity - Changing The Way You Think!
There are many ways to make money in real estate investing. Hearing about creative methods are what will set you apart from other investors.
Consider the following scenarios:
- \r
- Buy a property below market price, sell at market price.
\r This one is fairly obvious. Buy low sell high. NO creative thinking needed on this one.
\r This one is somewhat obvious - buy low sell high with a twist. Since you cannot normally sell a property to a buyer above market, you may see this as a problem. The banks and/or buyer will want an appraisal of the property performed, and the bank will not loan on a price above market price. But what if the buyer is in a situation that does not allow him to purchase a property in a conventional manner? Maybe he has bad credit, recently filed bankruptcy, or has no cash down. You could either sell it to him on a lease to own agreement, or sell it immediately to him holding the mortgage yourself, avoiding the bank appraiser, and justifying a higher than market price.
\r This is how I have made most of my fast cash during my twenty six years of real estate investing. I find a property below market and then immediately sell it below market - but higher than I have paid for it. This is the classic \"Quick Flip\" deal. Sometimes I buy and close on the property then resell it. Sometimes I buy and sell in the same closing (known as a simultaneous closing). Other times I simply sell the contract (Purchase & Sale Agreement) for cash.
\r This one probably has you confused. Let me give an example of how this can work: You purchase a property receiving financing at 7%. You offer to hold the financing by \"wrapping\" your financing and passing it on to your buyer. What this means is that you charge a higher rate of interest than your current rate and make the percentage difference in cash. In our example, if you are paying 7% on your financing, you could charge 8% to the buyer. If your loan totals $100,000, you would be making 1% or $1,000 per year on the difference. Do this on a more expensive property, a $300,000 loan and 3% difference in the interest rate and you would be making $9,000 per year, on OPM (the bank\'s money).
\r You may think this is a typo, but it\'s not. Let\'s look at an example. I buy a property at $200,000. I then immediately enter into Lease/Purchase agreement for $195,000. The terms are such that the buyer must purchase the property no sooner than five years from now, and the monthly payment is $200 higher per month than my monthly costs. At the end of the five years when they close on the purchase of this property, I would have taken in $12,000 in cash flow payments. I have also been able to use all the tax benefits of the property such as depreciation (approx. $29,000). So in effect I have made $41,000, sold the property five thousand dollars less than my purchase price (possibly giving me even more tax benefit)!\r
Yes, you can make profit on all the above. It\'s time to start thinking out of the box - that is where wealth is formed. Above were only a few possibilities concerning buying the actual real estate below market. How about buying a property for current market value and doing one or several of the above. How about buying a property for more than current market value? How could you make that work?
It\'s time to open all the possibilities of investing in real estate. It\'s Time for Creativity: Changing the way you think!
Alan is a millionaire real estate investor with over 25 years of experience. He is an author, speaker and educator specializing in creative and traditional real estate investing.\r To sign up to hear Alan\'s next teleseminar packed with practical know-how, visit http://www.hearthecall.net for free access.
Changing Broadband Service Providers
There are so many broadband providers available now, and so many different packages to choose from. Broadband gets faster, cheaper and more reliable all the time. The chances are that, if you have had your broadband service provider for a while, you may be paying more money than you need to. Most providers will not actively let existing customers know when new, faster and cheaper packages are available.Until fairly recently, changing broadband pr...
Attraction - How to Unlock the Power of the Law of Attraction
You may have heard a bit about the law of attraction but dont have any idea how to make it work for you. Or, you may be trying to make it work but cant seem to figure it out. No matter where you are right now you can learn how to unlock the power of the law of attraction.The first thing that you must realize is that you are already working the law of attraction perfectly in your life whether you know it or not. Everything that you have in your li...
The Second Chakra, The Dwelling Place of the Self
In Sanskrit, the second chakra is known as "Svadhisthana." meaning "dwelling place of the Self." It is from the second chakra that our sexuality, sensuality, emotion, creativity and passion flows as you can well imagine it is a deeply powerful and instinctual place in our energy, so much of our energy germinates in this chakra.Ruled by the element of water, the second chakra governs all of the fluids in the body, the reproductive organs and the ...
How To Stop Being So Afraid Of Changing Careers
Trick or treat!We're pretty good at playing tricks on ourselves aren't we?Many of you have tricked yourself into thinking that being afraid of changing careers means you shouldn't go ahead and pursue a transition. You figure that if you're that concerned about making a career change happen, maybe you should listen to yourself and not take any chances.When did you become so fearful?My experience has shown me that many people think that once you c...
Perfect Laptop Desk, A Solution to All Furniture Problems
What is the best way to use a laptop? If you are like me, you want something as portable as the laptop is. That solves all problems. If you have a laptop instead of a desktop, then right off the bat , you know that you are a person that values portability, style and comfortability. So why burden that laptop with a big, old, elephant-size desk?Producers Need Portability: So many times, us producers need that portability because we are on the ...
Posted: August 24th, 2008 under Investment In Property.
Comments: none