Let's give our opponent every aspect of power. He's knowledgeable, motivated, can prove everything he says, is energetic, resourceful, creative, courageous and ethical. What can we do? The opposite. We can be listless, dull, ignorant, unimaginative, unschooled, afraid and fearful, and exhibit a desperate craftiness. A strange thing then happens. Our opponent becomes benevolent. He shows us things about our position and alternatives. He helps us to understand the scope and advantages of any options we might have. He helps us to make a better deal.
A form of Mortgage or Trust Deed which acts like the Contract-for-Deed described above is the Wrap-Around Mortgage, (or All Inclusive Trust Deed – A.I.T.D.). In effect, these instruments are used to insulate the Buyer from the original loan terms and liabilities while providing the seller a way to stretch out taxes on gain and other tax advantages on mortgaged property. Both mortgages and deeds of trust can be ’wrapped’ by additional liens.
Creative Financing can be used to either buy or control property, or to enhance the profits in particular deals. See this sample deal with a $10,000 profit....
Let me tell you about one of the most successful real estate wheeler/dealers I ever met. He bought over 550 houses in a single year by finding people who were relocating. He sought out those who had homes with loans equal to approximately 60% of value. He also tried to locate owners of free and clear building lots of equivalent equity value. He would offer the home owner one of the lots free and clear in return for the owner's equity. And he'd offer the lot owner a 2nd mortgage at low interest rates and low payments in return for the lot.
A lender's fantasy is to have thousands of borrowers, up to their ears in debt, who transfer a major portion of their earnings to him each month in the form of interest and charges. On the other hand, this scenario can be a borrower's worst nightmare. Indiscriminate use of credit has brought even the biggest real estate moguls low. Between them, Bill Zeckendorf, Donald Trump, and Bill Levitt lost $billions because of debt. Using credit can become a habit that's very hard to kick.
Peter Fortunato was my guest speaker for the Tuesday night conference call. I have to say, it was one of the best calls we have had!
• Why real estate investing is very alive and well – despite hedge funds.
• What to say to get motivated sellers leads from people you don’t even know
• How to get sellers to agree to seller finance with great terms
• How you can pay retail and still get great cash flow• Why you can make better deals with caring than you can with dollars
CashFlowDepot.com member Marcus, discusses a recent deal that he bought from heirs who were very behind on taxes and about ready to lose the property. Jack Miller always taught is that the deal is never over... so Marcus continued to negotiate until he came up with a creative way to solve the seller's problem and reduce the amount of cash he would need to do the deal at the same time. Read on for inspiration
Forming a small mastermind group of like-minded investors can help all of you make more money and come up with creative ideas to solve tough real estate problems. Read about 3 problem properties which were sold as a result of Jack's mastermind group putting their heads and energies together.
One of the biggest mistakes I see investors make it to think they need to actually attempt to "buy" every real estate opportunity that comes their way. It's better to be selective about which houses you buy to keep. Just get an option on everything else then wholesale for quick cash.
All those creative real estate seminars, home study courses sitting on your shelf, and countless hours of studying the lessons at CashFlowDepot.com won't do you any good until you put the training in to ACTION!
To help you flex your creative real estate brain, and learn to come up with a variety of solutions to any real estate problem, I started the BRAINSTORMING section in the Forum at CashFlowDepot.com
Each Friday I will post a real estate situation. Your job is come up with a solution to buy and an exit strategy. There is NO RIGHT ANSWER.