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There sure are a lot of good creative ideas out there but what i would really like to see and im sure many others would too is how Jack or Jackie or another established veteran would achieve $2000 per month in possitive cash flow. Step by step for real documenting each deal along the way as if they were starting over today with just enough for a deposit. would they wholesale, rehab, lease/option, seller finance, borrow, option, hold, etc. what would they do first? how long would it take? in what order? etc. If a person needed more than $24,000 per year or had additonal family members to take care of then they could duplicate the system. Would anyone else like to see something like this done?
$2000 a month is aiming too low — set your sights for at least $5000 a month – you can get to $10,000 a month fairly quickly.
Here’s how I did it:
Because I had absolutely no real estate experience at all and didn’t know anything about repair costs, etc…..I started out by wholesaling (optioning)properties so I could gain confidence in finding deals, negotiating with sellers, learn my market, learn to estimate repairs AND BUILD UP A NEST EGG to work with for buying and holding.
AFter doing that for about 12 months, I started buying houses subject to the mortgage or with seller financing that would have at least $20,000 in equity and $200 a month in cash flow. The equity is not as important at the cash flow.
If I had to fix them up to get them ready to live in, I would sell with a lease option or seller financing so I could get all my cash invested in the deal back to use on a different house.
If I didn’t have to spend more than a few thousand on the house to get it ready, then I would just rent it out.
Meanwhile, I kept on wholesaling and used the money to buy more houses and pay off some rentals.
About 1/2 the time I would get the lease options or seller finance houses back — then I used the same plan as above. If I didn’t have to spend much to fix it up, I would just keep it as a rental. If I had to spend more than $3000 to get it ready, I would sell with seller financing or a lease option to recoup my cash investment.
I did some rehabs in the middle of all this too. But I really didn’t like it. It required that I borrow money from a prvate lender to buy. Use my money to fix up then wait and wait to sell and usually pay for part of the buyers closing costs and down payment. too much risk and too many moving parts and takes too long.
If the house required a cash purchase and a lot of fix up, I’d much rather just wholesale it to someone else than hassle with the rehab myself. While they are doing the rehab, I can do 8 more deals and make a lot more money.
I’ve also done some Lonnie Deals ( buy cheap mobile homes and sell for 4 – 5 times more with seller financing. GREAT CASH FLOW – LOW RISK and EASY.
If I could change anything, I would still own all the nice houses I sold. I’d have a lot more cash flow today if I didn’t sell anything to buyers who were getting a new loan to cash me out.
See – it’s not that complicated.
I’d say you should be able to get to $2000 a month in less than a year with this plan. If you work harder, you can get to $2000 a month in SIX months. If you work less, it will take you longer.
In 3-5 years you can be at $10,000 a month easy. That may seem like a long time, but it goes by fast and every month you are creating more cash flow.
A strategy I have not used much is master leasing — this would be an ideal way to get to $2000 a month in less than a year!!!
Hope this helps
Let me know if you have any questions
Jackie
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