How to Get Rich Off of Real Estate Deals Other Investors Reject!

I truly love the real estate deals that other investors won’t touch. Over the years, I’ve probably made at least $2 million dollars off of other investors’ rejects!

I am not saying this to boast – I am being frank because I want you to understand the opportunity that you have if you open your eyes to opportunity others are blind to.

One of my earliest mentors taught me to look for profitable deals in ugly, distressed properties. I have mostly built my career on little distressed houses that alone make me $400 or $600 a month. But altogether, those little houses make me tens of thousands per month in cash flow, which is what allowed me to financially retire so young.

Here are some ‘junk house’ deals that other investors turned their noses up at that I turned around and made terrific money on:

#1 Colima Avenue Made Me $6500

I bought this ‘junk house’ for $15,000 when no one else in my town seemed to want it. This allowed me to buy it more than 30% under market value! I sold it to an investor in California for $20,000, which was 30% under market value. I made a $5000 profit on the sale, plus a $1000 commission. He had it repainted in and out and the door secured, and other minor fixes. That cost him $5000 total in repairs. Then he resold it with owner financing.

Terms were $3000 down, $400 per month, with a final price of
$39,900. This deal is making the investor 12% ROI, and made me over $6000. And no one wanted it because it was ugly!

#2 Eichman Road Property Made Me $13,500

Last year I bought this ‘junk house’ on two acres south of San Antonio TX. I paid $24,000 for it. It was a hoarder house, so it apparently scared off other investors.

I sold it to another California investor for $36,000, making me $12,000, and $1500 for the commission. He put $10,000 into it for cleaning, painting, plumbing and running a city water line. It was sold owner finance for $5000 down, $795 per month, $72,000 final price. He is making 11% ROI on this deal with no property maintenance – on a property no one wanted! Not a bad deal.

Lessons Learned

I am often able to make money on houses that other people reject and for which there are fewer buyers. Many investors are scared off by appearances and don’t see the underlying value that is obvious to me. The few buyers for some of these houses means that I can get the property at 30% or even 40% under market value. So, on the resale, I can make a tremendous return! What you should do: Try to work with a top notch real estate investor who knows your neighborhoods and can help you find way under market value deals that other people don’t want. There could be gold there.
Ugly houses can be deceptively lucrative investments! You can get properties deeply discounted in some cases. With owner financing, you then can off load most of the rehab cost to your buyer. What you should do: Buy under market value distressed properties in markets that are inexpensive and have a lot of blue collar workers who are eager to own a house and fix it themselves.
Don’t be always afraid of foundation and roof problems. Common investor advice is to avoid these houses. Those are some of my best deals! No one wants them so you can get an incredible deal. There is a big difference between a minor foundation issue and a major one. I have the experience to tell the difference. Most of the foundation problems I buy can be fixed for $1500 to $2000. What you should do: Look for ‘junk houses’ in areas with good owner finance buyers even if they have reported ‘foundation’ problems. You really could get a great return!