For most of the last eight years, when interest rates were higher, I was able to buy houses subject to the mortgage or with seller financing all day long. There were weeks when I would do 2, 3, 4 deals a week or more. Life was good.
It didn't take long for me to realize that you can buy too many houses too fast and I had to slow down. But it was hard to resist all these almost free houses, and the equity and cash flow the sellers were just giving away.
I kept some as rentals and sold some with a lease option or a contract for deed.
Then Texas changed the laws to make it less attractive to do contract for deed because you had to give a 60 day notice to cure a default. You only need to give 30 days to cure a default when you sell with a Warranty Deed in Texas.
So, it was time for a course correction.
If I wanted to get top dollar, I had to sell with owner financing and take my chances that I would not have to foreclosure. With a 21day notice of default in Texas, even foreclosure was not too bad.
Everything was humming along just fine. I was routinely getting 10% down and 10% interest when I sold with owner financing.
Then 9/11 happened and it seemed like everyone in the United States was just holding their breath and holding on to their money. I had a hard time renting, doing a lease option owner financing or selling anything.
If people had any money in the bank, they were holding on it it… just in case there was another attack.
Like money would solve the problem!
Then, to make matters worse, interest rates started dropping.
My tenants started buying houses and leaving me with vacant houses to fill. Finding new tenants was not so easy. I tried selling with a lease option or owner financing but the dynamics all changed with the super low interest rates and “fog a mirror” loans.
After 9/11 – buyers were being more conservative and it was hard to get more than 3% down
What a difference a year can make!
Well – here we go again…time for me to do another course correction.
I went back to rehabbing some houses and selling to retail buyers because anyone could get a loan.
I've never liked rehabbing much but with low interest rates, I thought this would be a good way to go selling was so easy.
Boy, I was wrong.
I think all the good buyers had already bought houses by the time I switched back to selling to retail buyers. I did not time the market right and missed some great opportunities. By the time I started rehabbing, the only buyers left were the bottom of the barrel buyers who needed down payment assistance and someone to pay all their closing costs. Very often I had to pay a real estate agent commission too. After paying everyone else, it didn't leave much of a profit for me.
So, it was time for me to do a quick course correction again.
The first 4 or 5 years I was involved real estate ( 13 years ago) I just focused on wholesaing. I love wholesaling. I made a lot of money but I was not building wealth or CASH FLOW and that's why I started working on building up my rental portfolio instead of wholesaling.
Since nothing else was working, I knew it was time to pull the wholesale tricks out of my bag. That's what I was doing until subprime loans dried up – which caused many wholesale buyers to stop buying.
Over the years, I've figured out some incredible wholesale techniques that enable me to option and sell 10 – 20 houses per month and make a ton of money quickly.
But… now, MLS lisitings houses are just piling up! The number of days on the market is going up, up, up. That's happening everywhere. So, it's easier than every to get seller financing, a subject to deal or a master lease.
At the same time, now it's very difficult for anyone to get a loan to buy a house.
So… that creates a new opportunity to buy with seller financing then wrap the loan to sell to hungry buyers.
I'm smelling new opportunities! It's time to do another course correction!
As you can see, real estate is not a linear business. If you just doing the same thing over and over again, or if you just stay on the same course all the time, youwill miss our on huge profit centers and opportunities.
Real estate markets are local. So you need to analyze what's going on in your market.
If homes are not selling, then you can get a master lease or buy with seller finacing.
If buyers are having a hard time buying, then you can offer seller financing and get huge down payments and a monthly cash flow.
The opportunities over the next few years WILL BE INCREDIBLE.
CREWealth.com is dedicated to providing the information you need to take advantage of the opportunites now.
To YOUR Extreme Success
Jackie Lange
