What makes a property hard to sell? It can be ugly, dirty, shabby, low qualify or non-conforming construction, be functionally obsolescent or have an inconvenient floor plan, it may be on a poor or remote site, have EPA problems, deferred maintenance, indifferent or dishonest management, be encumbered with unattractive financing which incorporates short term balloon payments, high interest rates, reverse amortization; or it may be "red lined" so no new financing may be obtained.
Sooner or later, you'll make so much money buying and selling as a real estate dealer that you'll start looking around for tax shelter. The most obvious solution is, instead of buying low and selling high in rapid fire succession, to buy low and sell high in slow motion. By holding a house as a rental and reaping the income, tax-shelter, amortization, and depreciation benefits it throws off, you'll not only reduce the amount of earnings that are siphoned off by income taxes, but also build a solid retirement income when you decide to stop wheeling and dealing. Seller financing offers the best opportunity for achieving this.
Let's take a moment to review the effect of economic cycles on investments. Today with a low inflation rate, low interest rates, and booming real estate markets, it's difficult to remember that markets move in cycles. Good markets are followed by inflated markets where development and construction create too much product, so sales slow down. Unable to sell their product, builders go broke, creating depressed markets. Entrepreneurs rush in to buy on the cheap, creating more demand. This makes sales pick up, and we're back to good markets.
Finding I.D.E.A.L. properties is a numbers game. Many people step up to the plate expecting to hit a home run in the investment game their first time at bat. They quickly become discouraged and either settle for marginal properties which give them little joy and/or profit at the cost of much time, expense and pain; or they just quit and try something else. PATIENCE is your most valuable personal attribute if you can cultivate it. Acquiring the right properties should be a long term objective toward which the erstwhile fledgling capitalist steadily plods on his quest.
Continue reading “Don’t Look For Properties, Prospect For Sellers”
The trouble with buying houses at a county court house is that there’s always plenty, of competition from the professionals. This usually makes everything too expensive except for combat zone properties. On the other hand, there’s little competition at the federal court house. Here’s where Federal Land Bank, Farm Home,and direct VA loans are foreclosed. It’s also where the IRS liens can be purchased and where Bankruptcy Trustees liquidate assets. IRS distress opportunities come in a variety of packages.
One of the keys to success in any business is to avoid competition. If you can operate in a noncompetitive atmosphere, you can focus on expanding your assets and net worth rather than on beating out the other fellows for the few deals for which a transaction may be possible. The easiest way to avoid competition is to as much as possible avoid doing what all the other people are doing. You shouldn’t follow the crowd if you don’t want to wind up old and broke like the average American. If you want to achieve extraordinary success you must use extraordinary methods? What might they be?
When you first start to buy houses, it seems inconceivable that you could just ask someone if they wanted to sell their house or not at the front door. But when you think about it all those real estate offices that advertise page after page of houses for sale in the paper are proof that sellers abide in quantity out there in the big wide world. All you’ve got to do is to find them. Let’s approach the problem of finding motivate owners methodically.
Many readers of this letter may not be able to use either seller financing or investor financing to buy houses because of lack of investors or sellers who would be willing to provide financing. But, by using Options, they can buy, sell, and hold houses without the cooperation of either investors or sellers.
The essence of creative financing is to be able to transfer equity between buyer and seller with little or no money down. This requires at least two highly motivated parties who are willing to work together, and knowledgeable enough to make a deal. When a third party “deal-maker” is added to the mix, part of the profit can be carved out without any investment at all. Learning how to become that third party is a major key to being able to earn profits on every buy/sell/lease/Option transaction. To jog your imagination, here are ten ways that a deal can be made using creative financing with very little cash; but you’ve got to propose it.
Continue reading “Use Creative Financing For No Money Down Deals”
Failure to reach agreement as to value can break a deal wide open, so it pays to negotiate around this obstacle. This pretty well sums up the way that negotiation techniques earn their keep when buying or selling, and can secure quality homes at wholesale pricing.
