
There’s an old Italian proverb that more or less says a man can steal a whole loaf of bread if he does it a slice at a time. This incorporates two principles:
There are three opportunities with pre-foreclosures. The worst people to deal with are dead beats who are going to ride out the foreclosure and refuse to move out after the property has been bought either before or at sale. The best people to deal with are families with a large equity and otherwise good credit record who feel terrible about not being able to make payments.
When negotiating for price or terms, there is no incorrect answer. It all depends upon the viewpoint of the people involved. Who's buying? Who's selling? Why? What are their objectives? How much cash must actually be required to make the transaction work for all parties? What are their income levels and tax brackets? What are their ages? How sophisticated are they? What has their previous financial experience been? What are their security needs? How motivated are they? Why?
If you don't provide an acceptable solution, you will not be able to negotiate a deal. But the more thoroughly you understand the problem the more probable that you'll be able to find a solution. The most interesting part of this process is that other buyers can't compete effectively once the seller sees that you're trying to solve his personal problem while acquiring his property.
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Last time we were trying to solve the riddle of being able to buy houses at today’s prices and rents that would be feasible as long term rental investments that would generate current positive cash flow. I think trading in one house for another is the solution, but it’s almost impossible to find two people who can make a straight property swap.
You should be making at least one formal written offer every day, 7 days a week, 365 days a year. Where people go wrong is to make an offer, then to sit back and wait for a reply before making another offer. Learn how you can get more of your offers accepted
Seller financing is the fastest way to sell a house quickly. Learn how you can sell with seller financing even if the house needs a lot of work.
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As with most jobs, you can find a thousand reasons to put off starting to buy houses until another time, but that would be a costly mistake. Why? Because you'll lose all the time that your capital could be compounding. Using a $100,000 house (adjust the value to your own area) maybe I can give you an example of why time is so precious when building an estate.
The problem with buying houses to hold long term is that it consumes a lot of cash and credit and requires years to build wealth. One enterprising fellow found a way to get around this problem by recycling his cash in and out of houses on a monthly basis while he left his un-sold equity behind to continue to grow and compound at unbelievable rates of yield. Here’s what he did:
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