John was broke! He'd been wiped out in a collapsed speculation on land that had left him little other than an appetite for good living and a creative imagination. He was smart and willing to do just about- anything except hold a regular job. He retained his lavish life style replete with a fine home on the water, an airplane, a sailing sloop, an island hideaway -and even regular access to one dining and liquor at a popular restaurant. He did this by selling fractional portions of each and retaining an interest for himself. Here's how he did it:
John was a good negotiator. He avidly sought out properties that he wanted to own. When he found a property he wanted to own, he would negotiate a cash price at a “wholesale” price way below true value. Then he really got cracking.
Once he'd gotten a purchase contract signed, he'd SYNDICATE the transaction with all-cash investors who knew a good deal when they saw one. Naturally, he dealt with real estate investors on his house, boaters on his boat, etc. He offered ONE FIFTH INTEREST IN THE PROPERTY IN RETURN FOR ONE FOURTH THE COST! He kept the remaining fifth for himself along with the right to use the property which he shared with the others.
He even rented his personal water front residence for 4/5ths of market rents – which were considerably lower than economic return. But because of his wholesale price, his investors stayed happy with the deal.
From Jack Miller's CREATIVE FINANCING eManual.
