What's the ultimate strategy?

 

It's a real estate investing "business model" that works anytime, anywhere and on any type of real estate. It works in slow markets, normal markets, hot markets and post-hot markets like California, Florida and Arizona. It's a laser guided approach... very specific and targeted. It's a simplified approach with every step of buying and selling made easy and systematic.

 

So what do I mean by a real estate investing business model?

 

Think of all the ways we might do a deal as a "transaction engineer."

 

First there different types of property you might target like pretty houses, ugly houses, multi-family and commercial (just to name a few).

 

Next there are a number of ways to buy, fund or control a deal like buying subject to, creating owner financing, offering all cash or getting an option agreement.

 

Then there are a variety of ways to occupy, sell or hold a property such as flipping, renting, leasing optioning, retailing or selling with owner financing.

 

When you combine what you buy with how you fund it and then how you sell it, you have a business model. Make sense? As you may know, there are dozens of great ways to do deals. And my clients and I have made millions using most all of them.

 

But there is one strategy that is my favorite. It's truly the ultimate strategy. When I compare it to all the other models like wholesaling, retailing, lease options, rehabbing, short sales, etc., it provides the longest list of benefits and solves most all of the challenges real estate entrepreneurs face sooner or later. I lovingly call this strategy "The Free and Clear Money Machine." But I also simply call it The Ultimate Strategy.

 

Here's how it works...

 

1) Target houses with lots of equity

 

Many real estate entrepreneurs have discovered that when there's more equity in a deal, there are more exits and more ways to create an acceptable offer to the seller.

 

If there's no equity then you have to create it by discounting the debt or waiting years... hoping the property appreciates. The benefits of targeting houses that are free and clear (or have very little debt) include:

 

* If you need cash for buying and getting a house occupied, you can borrow against the equity (without bank qualifying) using hard money loans or private investors.

 

* Not only can you raise cash for a down payment, repairs or remodeling, paying off liens, marketing expenses and holding costs BUT you can also pull out some EXTRA cash on the day you buy.

 

* Contrary to what a lot of investors may think, sellers with free and clear houses in many cases do not need any of their equity in cash now. If they did, they would have pulled it out sooner.

 

* Sellers with high equity tend to be older and many times like the idea of receiving a monthly cash flow. This allows you to buy in installments, paying the seller off with the income from the property.

 

* A lot free and clear houses are non-owner occupied and the seller might be facing a big tax bill if they received all their money at once. You can help them defer or stretch out their tax bite by having them finance your purchase.

 

* You will find landlords with multiple properties who want to eliminate all their management hassles and sell all of them to you.

 

2) Create offers with 0% owner financing

 

If doesn't matter what price a seller with a free and clear house wants. I can always pay it. The only question is WHEN. The longer they can wait, the more I can pay. The benefits of creating an owner carryback note at 0% interest include:

 

* You can offer a higher purchase price and get more of your offers accepted by having the seller wait for part or all of their equity.

 

* You can create a lump sum balloon payment due in several years and collect all the cash flow from the property during that term.

 

* You can give all the net positive cash flow to the seller to rapidly pay off the principle balance due and build huge equity positions without ever relying on appreciation.

 

* If the seller ever wants to be paid off early you can discount their note at a guaranteed 35%+ annual return, or move their mortgage to another property.

 

3) Make 15% net profit on every house you buy

 

When you show a seller what they might net selling their house traditionally, you can easily get them to take 10% to 15% off the present value and still call that full retail price. You can then get them to go even lower by asking if it's OK if you made a margin on the deal. Then lower if you took the property as is. And even lower if you gave them some or all of their equity in cash now instead of later.

 

Once you can reliable predict what you can sell the house for offering owner financing or a lease option to your buyer, you can then determine the maximum price you can pay the seller. I suggest your price to the seller ensures you get at least a 15% net profit after your transactions cost of buying, holding and selling. If that drives the price down too low for the seller to accept, you now can push the price back up by stringing their money out into the future.

 

4) Sell quickly on with owner financing or lease option

 

Since the mortgage market meltdown, sellers are having trouble selling BUT buyers are having trouble buying also. Many of the loans for less than A-paper buyers are gone. This has created a growing demand for rentals and the need for creative seller financing. Cha ching! The ultimate strategy has the answers.

 

When you've created 0% financing on a house you bought, how quickly do you want to pay it off? Never! Then how can you sell? You sell to a tenant buyer and insist they close with wraparound owner financing. Or you find a buyer with more money down and close NOW with wraparound owner financing. On a "wrap" you make a mortgage payment to your seller while collecting a mortgage payment from a buyer. You keep the difference.

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