Real Estate Deal Making:

Another way to get great real estate deals is by pre tax sales. I am not interested in buying a property at a tax sell , but before it make its way to a tax sell. In the Memphis area, our local newspaper has a published listing of these properties that will be heading toward a tax sale approximately 4-6 weeks before the date actually arrives. The surprising thing to me is that when you start contacting owners of properties with delinquent taxes, some of them actually don’t know that the property was going to tax sale. PLENTY of time for me to make a deal with a motivated seller. Contacting them and explaining how you can help out their situation that needs immediate attention will have you looking like the knight on the white horse. Our Local municipalities cares absolutely nothing about the equity involved, they only want the tax situation resolved. What a win win situation, you helped  a home owner sell fast and bought a home with a significant amount of equity for pennies on a dollar.

Lethal Investing Mistakes

 I wanted to share with you all several common mistakes new investors make when buying real estate.
(1) Having no exit strategy and planning as you go: Many new investors look at real estate as a transaction instead of an investment strategy. You create value when you buy well below market, and make money when you sell. You must have a solid plan in place to profit from it. (2) Paying too much: You can not use the bank sale price to determine what to offer on a foreclosed home. We have been buying and selling foreclose properties for a long time, I am here to tell you that the banks list price may or may not have anything to do with the value of the home. Know the market value, take into account the amount of repairs needed and cost, what is my exit strategy, your offer should reflect real numbers and your built in profit.
(3) No resources: You have got to be working with a company that is in the know. You will almost never do a real estate deal if the company or person you are using relay on one source of information. I call them part timers. You can be a part timer, but the company you work with needs to be active in the market. The best deals are the ones that the public has no knowledge about.You can create wealth and solve problems by becoming a distribution center for people who need to sell fast, and buyers who are loooking for a great deal. If you work with the right team, they can save you time, money and minimize rookie mistakes.

Cash Flowing in a Down Market!

Today I would like to share with you a great technique on how to cash flow in real estate in a down market. In todays market, there are a lot of homes for sale that will continue to sit and become COLD LISTINGS. But with the right leverage and technique, you can turn a cold listing to a hot cash flowing property. To own real estate is great, but to control it with out ownership is even better. Let me show you how. You find a seller that has trouble selling their home. Maybe they took a job in another state, divorce, or inherited the home from a family member. For whatever reason the property is vacant, and needs to sell quick. Lets say they are asking for $50,000 for the home, and it will appraise for $65,000 easy in a down economy. For this to work, you will need to be open and honest with the sellers about your intentions for the home. Now pay attention! You offer them the full asking price of  $50,000. They owe $25,000 with a monthly mortgage of $400. You are sure that you can rent the property for $650 a month. You explain to the seller that you would like to lease the property with the option to buy and the right to sublet the home. You all come to a written agreement allowing you to lease the home for 2 to 3 years with the option to buy,with a down payment of $1,000 nonrefundable and monthly payment of $400. You now find a buyer who would like to lease the property from you, who now has full control of it. You lease it to them for 1 year at $650 a month with a nonrefundable down payment of $2,500, and selling price of $65,000. They now have 1 year to aquire financing to purchase the home from you who control the deal. Now you have turn a cold listing into a cash flowing home. You made $1500 off the option fee, $250 for 12 months in rental income, and $15,000 when the home sells to your end buyer. Now everyone is happy!