Investing in Real Estate Well Done: Your Fastest, Safest Path to Wealth
In investment real estate, the fastest way to build wealth is through owner financing or the lease option. So, let’s take a look at a model transaction, which involves the buying and selling of two properties in lease option contracts so that you can apply it to your own real estate investment system.
Suppose you buy an investment property for $ 50,000 to $ 60,000 and sell it on a lease option for $ 80,000. You receive $ 4,000 as a down payment from the buyer, and you will get the balance in 12 months. You have created a note for the remaining $ 76,000 that pays you $ 570 per month (9% interest only payments). This gives you almost $ 7,000 more in interest payments, if you keep this property for one year. Then you find a rehab property in an inexpensive neighborhood that you can get for $ 35,000. Offer a 10% down payment of $ 3,500, promising to repay the loan in 13 months or less.
Now you can use the $ 4,000 from the first property, so you don’t have to put your own money down for the down payment on your second property. Offer to pay 8% on the remaining $ 31,500. This is a monthly payment of $ 231. Make sure your agreement allows you to defer your first payment for 30 to 60 days. Now, if you can’t sell the house in 13 months (this certainly won’t be a problem, though), you’ll have the cash from the first house you bought, when the balloon payment of $ 76,000 is due in 12 months. , so that you do not lose anything or have to get your own financing, when you have to pay off your second home in 13 months.
You see, it is always covered when you use this approach. If you make a smart purchase in this second home, you should be able to invest a few thousand dollars and resell it in a few months. Make sure you make a profit well above your purchase price of $ 35,000 and whatever you have invested. Again, if you buy smart, after some great rehab, you should be able to sell the property for $ 45,000 to $ 50,000. You end up earning approximately $ 30,000 to $ 35,000 in a year or less from the sale of your first two properties. This does not include the additional thousands of dollars in interest you have made on the payments you are collecting. Learn more about this strategy at http://www.winningthemortgagegame.com.
