A lot people who can’t seem to find houses that they can buy and finance in a way to provide cash flow as rentals either simply give up and quit trying, or they send their money to far corners of the country where houses are cheap.
All around the country, there are larger luxury homes for sale that aren't feasible as rentals, but which could generate huge profits using Option techniques. Because of the down-sizing of corporate America and Government institutions, many formerly high-paid executives are in a cash squeeze with high house payments which no longer fit into their shrinking budgets. The market for these houses is extremely thin in many areas and sales are slow. Cash invested now can buy a disproportionate share of the eventual sale proceeds. Here's a way that these Options can be structured:
Continue reading “Options Make More Expensive Properties Feasible”
This small office building story illustrates how critically important Option terms can be to the ultimate profitability of a deal. My Option gave me 24 months to raise the money for the down payment and for rehabilitation of the building. I didn't wait until the last minute to start setting aside money from my earnings. The certain knowledge that I'd need money to close my Option gave me the incentive to work a lot harder to earn and save more. I also started seeking out tenants who would do their own improvements in return for lower rents. I closed the Option with the building fully rented. My annual net operating cash flow was $7000 more than the loan payments.
Continue reading “Limit Risks From the Start with Feasible Option Terms”
Last time we talked about starting small by signing a long term lease on the property you're rent in exchange for an Option to purchase the property. If you've also negotiated an Option to buy with a credit for rents against the purchase price and down payment, you'll be building equity in the property with each payment that you or the person to whom you sub-lease or to whom assign your lease pays.
Continue reading “Let Your Sub Tenant Help You Buy An Option”
Sometimes the profit motive brings out the best, and worst, of us. There were a couple of friendly rivals among Exchangors a few years back named Cliff and Art. Art was far and away the most successful financially, but Cliff was the more artful – as in artful dodger – of the two. No matter how hard Art tried to best Cliff in a deal, he never quite pulled it off.
Continue reading “Making Money With Nothing Down and Nothing a Month”
I like to think of learning as a way to see things that were there all along, but which I couldn’t perceive without the new insights I’d gain through learning. It’s kind of line the jeweler who has glasses with increasing magnification. With each additional lens, he sees things that weren’t visible before.
Continue reading “Learning New Ways To Do Business Creates More Opportunity”
A real estate Option is the most useful of all real estate tools when it comes to making money. Not only can it control future profits, but also current profits when used for that purpose. We are all familiar with the benefits of Optioning land at a given price, then getting it rezone for a higher use, or finding a builder/developer who will joint venture to increase its value, or putting a mobile home on it to increase its value before exercising it.
Continue reading “Creative Uses of Options to Control Profits”
By the time you read this the 2007 version of my Options seminar will have already been given, so this isn’t some kind of commercial for a seminar. Let’s call if a reprise of what many of the people who are now in trouble with negative cashflow and dropping equities should have been doing over the last few years.
Did you notice in my last Blog that somewhere along the line I stopped being a real estate agent and started being a principal? As an agent, I’d have had a fiduciary with the homeowner to get the best price and terms. As a principal, I had no such fiduciary and was able to use any skills I might have had to get the lowest price and terms. My fiduciary with the buyer was to deliver the house at my contracted price, which earning $30,000 made me quite happy to do. But when the buyer turned the house down, I could buy it myself and do with it what I wanted.
