5 Ways to Use Real Estate Investing To Achieve Your Financial Freedom

This article is now on Inman News.

Takeaways:

  • Find an inexpensive, stable real estate market and become a local property expert.
  • Find private investors and a mentor who has done more than 500 deals to help you learn.
  • Owner-financed real estate is always profitable.

Many of our investors in San Antonio financially retired when they were relatively young. They developed positive cash flow in investment properties without coming from money.

They were able to build nice portfolios of distressed properties in Texas in cash.

Here’s how you can do it too:

1. Find an inexpensive, stable real estate market

When most of our investors started, they were in college and didn’t have a lot of money. Some of them came to Texas and tried to invest in Austin; even 20 years ago, it was expensive. But many investors we have looked to San Antonio investment properties.

  • $30,000 houses.
  • Lots of blue-collar workers.
  • Diverse and healthy job market, not just oil and gas.

This is a very good city for fixer upper homes under market value. I bought my first house for $25,000, rehabbed it for $5,000 and made 10 percent annually by renting it out. That was the beginning.

Lesson learned: Avoid real estate markets with high entry costs if your capital is limited. Lower-cost cities are much easier for beginners to invest, especially in distressed sales.
Avoid real estate markets with high entry costs if your capital is limited.

2. Find private money

So our investors would often have one or two properties but little in the bank. What to do? Make calls and find private money. You also can go to real estate meetings and look for capital.

It isn’t easy, but you can find some investors who will loan you money at reasonable rates; some of our investors have done that. It’s how they built a large portfolio of San Antonio distressed properties.

Lesson learned: Be ready and able to make hundreds of phone calls and knock on many doors to find private capital.

3. Become a local market expert

In the early years, many of our investors swung a hammer and did many rehabs themselves. Doing the work myself taught them to understand the little houses they invest in so they could become distressed property experts.

They learned what a San Antonio rehab should cost on an investment property and to never overspend on a rehab. Overspending on rehabs can kill your real estate career.

Some of our investors became real estate agents so they could source their own deals, and find deals at least 20% under market value.

Lesson learned: Learn your local market so you can get houses well under market value. Can’t find them in a hot market? OK, then go to a dozen real estate meetings in the next three months, and find an expert real estate investor who can help you find those deals.

Offer to help them with their business — anything from making calls to hanging bandit signs — in exchange for helping you find under-market-value deals.
Find an expert investor to help you find deals, and offer to help the investor with business.

4. Find a good real estate mentor

Starting in real estate investing without a mentor is like playing tennis without a racket. Every single rookie investor should work with an experienced, successful investor mentor who has done hundreds of deals and succeeded in boom and bust real estate markets. I found several in distressed sales.

You can find mentors at city real estate meetings. You also can go to real estate investor meetings in other towns. You can connect with a lot of rich investors with networking.

Lesson learned: Find a mentor who has been in the business for 10 years, has done 500 or more deals, and has made profits in the most recent real estate downturn. That’s someone you want to work with.

5. Invest for cash flow with owner financing

In 2005, one of our successful mentors taught me that rental real estate often is profitable, but done right, owner-financed real estate is always profitable.

So many investors stopped rehabbing and renting properties that year, and changed to owner-finance only.

Now, they buy for cash, do $10,000 or $20,000 in rehab, and resell the home with owner financing to a buyer with $5000 down.

This model has no ongoing maintenance or property management costs. Each house puts $500-$700 a month into their bank accounts, and they don’t have to do anything.

Every one of their investment properties has positive cash flow, and was bought solely for monthly cash flow from owner financing. Most don’t buy for appreciation.

Lesson learned: Think about investing strategies other than renting out houses. Owner financing is much less stressful, and the cash flow is more stable.
Owner financing is much less stressful, and the cash flow is more stable.

Following those five essential tips is what many of our investment property investors to retire early, and you can too!

How to Avoid 2 Ugly Real Estate Train Wrecks

This article is now on Inman News.

Takeaways:

  • There are approximately 28 million real estate investors in the U.S.
  • Trying to invest on your own is a surefire way to overpay and lose your profits.
  • Your real estate profit or loss is locked in the second you sign the contract, so you must make sure you have the best deal possible.

My first real estate investing career in 2005 ended in smoldering ruins. I lost money on every property and eventually sold them off at a $150,000 loss.

My second foray in real estate, however, has been highly successful. The difference: I have avoided two ugly real estate investing train wrecks that derail many aspiring investors:

Train wreck 1: Going it alone

Many real estate investors — there are approximately 28 million in the U.S. today — enter the business in haphazard fashion. They lack both a plan and guidance.
There are approximately 28 million real estate investors in the U.S. today.

The sad story goes something like this:

  • The investor earns $100,000 in home equity and wants to make money with it. So they take out a line of credit.
  • They think real estate investing sounds like a good idea.
  • With no experience or idea what to do with the house, they buy a house that costs too much. Then they pay $10,000 more than they should for rehab, take four months to rent it out, and then they have to evict the tenant, which takes three months.
  • By the end of year one, they lost money and think real estate investing is a terrible idea.

Real estate investing on your own without a plan is an awful idea, and it will cost you your profits.
Real estate investing on your own without a plan is an awful idea, and it will cost you.

I avoid this train wreck now. In my current investing, my plan is to buy under-market-value properties in San Antonio, Texas, from $40,000 to $80,000, do $5,000 in rehab, and resell them with owner financing.

I earn 12 percent return on investment (ROI) typically with zero property maintenance costs.

That’s a plan. To execute it, I work with an expert real estate investor who finds me deals that match my model. If I can’t get the house at the right price, I move on to the next deal.

Action plan

  • What to do: Scout local real estate investing meetings for an expert real estate investor.
  • What to look for: He or she should have done at least 500 deals and been in the industry for 10 years.
  • What else to look for: A long track record of success through real estate crashes.
  • The pitch: Offer to help the investor with their business (answering phone calls, posting bandit signs, gofer work) in return for mentoring you.

Train wreck 2: Paying too much

Most rookie investors lose money because they pay too much for the property.

Remember that your real estate profit or loss is locked in the second you sign the contract. If you overpay, you are probably going to lose money.
Remember that your real estate profit or loss is locked in the second you sign the contract.

The worst-case scenario is that you pay out of your savings account to keep the property afloat and to keep you out of bankruptcy court.

Lesson

You must perform a thorough analysis of any property you might buy. If you are renting property, you need to know:

  • Mortgage payment
  • Down payment requirements
  • Rental income for you to qualify for a loan
  • Price-to-income ratio
  • Price-to-rent ratio
  • Rental yield
  • Capitalization rate
  • Total monthly cash flow after all expenses

Action plan

  • What to do: Work with your expert real estate investor to ensure that the property will generate cash flow after all expenses are considered.
  • Consideration: Owner finance the property to a qualified buyer, instead of renting. This strategy saves you rehab costs, maintenance costs and eliminates cash flow worries.
  • Another consideration: About 24 percent of U.S. real estate investors buy properties in cash. Owning investment properties without mortgages provides peace of mind and more cash flow.
  • You can buy investment properties with IRA or 401(k) funds, as do about 4 percent of U.S. investors.

Hopefully, sharing the train wrecks that I incurred and the strategies to overcome those wrecks will keep you on track with your investments.

Does the Zestimate Mislead Real Estate Investors?

This article is now on Inman News.

Key Takeaways

  • Zillow states on its website that it is a “useful starting point” to assist homebuyers with valuing real estate properties.
  • Although most investors say that Zestimates seldom reflect what’s happening on the ground, some new real estate investors seem to rely on Zillow as their main data point on property values.
  • Rather than relying on Zillow, it’s better to find local agent investors who operate in the real world and can provide accurate values of homes based on many factors, including comps, buyer and seller motivation, damages and more.

Zillow states on its website that it is a “useful starting point” to assist homebuyers with valuing real estate properties. Some real estate investors say that though Zillow is indeed a data resource, it can mislead investors about the real value of property.

They claim that Zillow Zestimates seldom reflect what is happening on the ground in neighborhoods that they know well. However, some new real estate investors seem to rely on Zillow as their main starting point for property values.

Close examination suggests that Zillow might not be a good tool for gauging real estate investment property values.

The Washington Post reported in February that the error rate for Zestimates “can be high.”

Another article in the same paper states that Zillow’s predicted values “are wildly inaccurate and inconsistent.”

The fact is that the Zestimate utilizes data pulled from public records and some homeowners; even Zillow states that its values are mere estimates. However, many investors fail to scrutinize the fine print and take those numbers at face value.

Those investors should note that Zillow is primarily a listing aggregator. It might be pulling sales data from many secondary databases that are not frequently updated. Therefore, it might take a month or longer for local neighborhood prices changes to show online.

A good example of the skewed data that Zillow can rely on is shown in the following example. This house in San Antonio, Texas, in the 78201 was bought by an investor for $65,000 cash in July 2015:

new front

It sold with owner financing for $99,000 five weeks later. Zillow stated that the value is $74,100. That price is more than the investor paid by $10,000. And the owner finance sale was not reflected in the Zestimate because it was an off-market deal.

Many real estate investment purchases might be done in this fashion: off-markets are not reflected in Zillow data.

This article on Zillow.com states that has a median error rate of 8 percent. This statistic suggests that Zillow might not be an effective way to price real estate investments.

Zillow can be a useful starting point for property values, but if a real estate investor wants to obtain accurate real estate investment property prices, there are better options:

  • Obtain access to local, brokerage-based sites in your desired cities. They will provide you with fresh property data that might be more accurate.
  • Locate an extremely experienced investor and real estate agent in your city. Local agent investors operate in the real world and can provide accurate values of homes based on many factors, including comparable listings, buyer and seller motivation, damages and more.
  • You should target an active investor who does 50 or more deals per year in your chosen neighborhoods. He will most likely have a bead on what prices are like right now.
    You should target an active investor who does 50+ deals per year in your chosen neighborhoods.
  • An experienced and successful investor in your market could be the ticket to getting a real estate deal at the best price.

3 Habits to Get Rich in Real Estate Investing

This article now appears in Inman News.

Key Takeaways

  • Get in the office early, and leave late. Work while those other real estate investors are sleeping.
  • Ignore popular thinking, and do you.
  • Hang around people with happiness, joy and optimism, and all of that positive energy will rub off on you.

Many investors we know bought 20 or 30 investment properties before they were 30 and financially retire.

Your odds of retiring early in real estate investing will soar if you practice these three habits regularly:

1. Work hard.

There is no substitute for applying as much effort as possible in real estate at every moment.

Many top producing CEOs say that they get up at 6 a.m. and often do not lie down at night until after 9 p.m. Those producers are dead on the money. In my first five years as an investor, I clocked countless 18-hour days.

Most of my packed days were filled with calling as many as 100 people as I looked for deals and capital. I never surrendered. Sometimes I had to speak to five or more people to find the one who could loan me money.

Get in the office early and leave late. Work while those other real estate investors are sleeping.

2. Ignore popular thinking.

Author John Maxwell wrote in the best-seller “How successful people think” that high achievers think differently than others. They often ignore what most people think and sometimes do the opposite of what conventional wisdom states.

In my real estate investing, I reject the conventional wisdom that I should buy attractive properties in nice parts of town. My reputation in my city is a real estate investor who buys distressed houses.

I purchase only at 20 percent to 30 percent under market value and for cash flow. I do not care about appreciation, and I rarely rent my houses. Instead, I owner-finance houses to subprime borrowers, which defrays most of my repair and ongoing maintenance costs.

I recognize the value in real estate investments that many other people do not see; I then developed a business model that capitalizes on this fact.

For example, I purchased this house for only $15,000. No one wanted it, and 30 days later, I sold it for $20,000 (a $5,000 profit) to another investor. Then, he resold it with owner financing at 12 percent.

He has bought three more houses from me since that deal. I made about $3,000 on each of those deals, so my bottom line profit on a house no one wanted: $14,000.

3. Hang around positive and focused people.

The psychological researcher Barbara Frederickson did some amazing research a few years ago. It detailed how thinking positively has a positive effect on the brain.

Her clinical study had five subject groups, and each one was shown a different film clip. The first two groups watched clips that produced overall positive emotions, such as a happy married couple having fun with their children outside. The third group saw a neutral clip; this was the control group.

The other two groups viewed clips that stirred up negative emotions, such as a couple arguing, people fighting and children crying. After, every group was asked to think of themselves in a situation similar to what they watched. They then were told to write down what they would have done in such a situation.

The test subjects who viewed negative clips wrote the least. Subjects who viewed happy scenes wrote the most.

This research suggests that if you as a real estate investor experience positive things, including joy, optimism, happiness and love, we open ourselves up to more profitable and beneficial experiences in real estate.

I totally agree with this.

When many of our investors got into real estate investments, they had debt and little cash. But they found investors who were successful who mentored them.

They were very positive people, and their goals were much higher. They wanted to make $15,000 or $20,000 per week.

These positive people helped our investors on being wealthy and successful. They absorbed their enthusiasm and joy, and realized they could do it too.

They taught us to learn as much as possible about my local San Antonio, Texas, real estate market to find the best under-market value deals. They also taught our investors to be patient and they got wealthier.

We learned from them to make small ($1,000 or $2,000) profits on many deals or to make $4,000 on a flip.

We never focus on making big profits on one deal. Rather, we do 50 houses in a year and make $250,000 — that’s big bucks in Texas.

Hang around people with happiness, joy and optimism, and all of that positive energy will rub off on you.

No matter your position in real estate investing, you can apply these three lessons to greatly increase your investing success and wealth.

But remember: Pass on these positive habits to other real estate investors, so they can benefit, too.

Why Daring to Be Unpopular in Investing Pays Off

This article now appears on Inman News.

Key Takeaways

  • The ‘herd mentality’ in investing leads to subpar results.
  • Buying an ugly house, in the right area, can be a fantastic investing opportunity, but don’t overpay for your rehab, or your profits will evaporate.
  • Buy real estate property under market value in revitalizing areas, regardless of its current appearance.
  • Positive cash flow often comes from the most unattractive houses (on the surface at sale)

A friend of John C. Maxwell, author of the book “Thinking For a Change,” observed: “The problem with popular thinking in business is that it doesn’t require you to think at all.” Most of us don’t want to do the tough work of thinking.

It’s much easier to just follow the herd in investing and hope they thought it all through. That’s why so few of us are ever rich and successful.
It’s much easier to just follow the herd in investing and hope they thought it all through.

Look at the stock market. The herd instinct of many conventional investment managers and their clients encourages them to invest in index funds, exchange traded funds and government bonds.

Popular thinking says that type of stock market investing is safe. Blindly following the crowd isn’t thinking, which is why it usually brings average results.
Unpopular investing in the stock market

However, two contrarian investment managers in New York City named Martin and Ari Sass reject this popular thinking in stock investments. Instead, they conduct deep, forensic research of companies to determine the few with the strongest management that meet a stringent criteria.

This investing style has led them to better returns with less risk — to the tune of now having $7.5 billion in assets under management for Fortune 500 firms and high-net-worth individuals. And note that both men started with no money and no Wall Street contacts. Daring to be unpopular in stock investing can achieve incredible results.
Unique thinking in real estate investing

Similarly, daring to be unpopular in real estate investing can yield spectacular results that few investors achieve. In my San Antonio, Texas, real estate investing career, which spans 15 years, I have made several million dollars by embracing unpopular thinking.

In short, I buy what other investors sprint away from.

Most real estate investors in my city chase 5 percent returns on rentals in $200,000 pretty houses or $40,000 returns on flips. Not me. I love making $5,000 on a deal when I do an occasional flip. Usually, I buy ugly, distressed houses from $25,000 to $70,000 in blue-collar neighborhoods that some investors would never consider.
Junk houses

Falling-apart house in the right area? I’ll take it. A burned house? No problem. Holes in the roof? Great. Foundation issue? Love it. Dirt floor? Of course — sold. A two-bedroom? Yes. A one-bedroom? Heck yes — I’ll convert it to a two- or three-bedroom for $5,000.

No one wants these deals, so I get a fantastic price, and most of the fixes and rehab are easy and inexpensive for my wholesale-priced construction company to complete. I can have a positive cash flow deal in 90-120 days.

In most cases, I buy in up-and coming-areas. So when I owner-finance these distressed houses after a partial rehab to carefully screened buyers, they sell quickly. It’s now a quite pretty house in a revitalizing area that is near downtown.

For me, the investor, owner finance means that I have zero maintenance costs. I make long-term cash flow in the 10 percent to 15 percent per year range on every one of my deals without fail.
For me, the investor, owner finance means that I have zero maintenance costs.

Popular thinking rejects my model, naturally:

  • That area has high crime. It’s too dangerous.
  • My $25,000 real estate investing seminar said “never buy ugly stuff.”
  • Those houses are falling apart and too expensive to fix.
  • You can’t resell a two-bedroom, one-bath.
  • You’ll never find a good, paying occupant for those houses.
  • That house should be demolished.

I love that conventional real estate investors are too lazy to do their own thinking. That means more great deals for my investors and me.

Here is a typical property that I buy:

fff

This distressed property sale home is only $24,000, and it’s a located in 78207, where the city of San Antonio has poured tens of millions of dollars into revitalization: parks, running and walking trails, picnic areas, shopping plazas, green space and more. It’s only about two miles from downtown. It’s currently ugly and just sat there. I snatched up this distressed property sale.

Next door and across the street are owner-occupied houses worth $80,000 to$100,000. When this ‘junk house’ is fixed up and resold, it will quickly gain in value.

But no one wants my junk house because of its current state:

Living_Dining Kitchen

Conventional thinking cannot see beyond the surface ugliness in the property investment, but by engaging my brain, I see the obvious: Because of the neighborhood and the revitalizing nearby, this deal is a fantastic investor opportunity.

This house only needs $19,000 in repairs completed in 30 days or less (my construction company cost; retail cost would be $30,000 or more):

  • Electrical update
  • New flooring (float new floor over that minor foundation issue after it’s repaired)
  • Clean out
  • Update bath and kitchen with tile and granite
  • New light fixtures
  • Paint in and out
  • Finish second bedroom

After-repair value will be approximately $60,000 to $65,000 (I always run neighborhood comps). On an owner-financed note, this house will return approximately 10 percent per year to the investor — with no maintenance costs. With the pretty homes next door and the parks, running trails, shopping and downtown so close, this house will resell in 30 to 90 days.

However, because the house is ugly, and most investors learned to never buy ugly houses at their real estate investing seminar, they will miss out on a great deal. It is deals like this one that have made me wealthy beyond my dreams.

And it’s mostly due to the fact that I ignore popular thinking, and I dare to be unpopular.

So should you:

  • When investing in real estate, think about rejecting the conventional wisdom.
  • Buy an ugly house under market value in an up-and-coming area.
  • Do the necessary repairs to resell it, but don’t overpay on the rehab.
  • Consider owner-financing the property to a well-qualified buyer.

And you could have yourself a fantastic long-term investment that the non-thinking herd will never enjoy.

Why I Never Fear A Foreclosure

This article now appears on Inman News.
Key Takeaways

  • I often get houses back in even better condition than when I sold them.
  • Although some sources say the entire process takes three months, in my experience, I get a house back in 60 days or even less.
  • The foreclosures happen fast, I get $5,000 down again from every new buyer and I continue to buy houses and owner finance them.

The first few years after the real estate crash led to a flurry of investors snatching up foreclosed properties, rehabbing and renting them out, then reselling a few years later at a profit. For some it worked out, but for others, the appreciation never materialized.

My real estate investing business deals with foreclosures as well, though indirectly: I buy distressed houses, rehab and resell with seller financing (investing for pure cash flow, not appreciation). I never mind taking back a property.

In fact, as an owner finance specialist in affordable homes in San Antonio, Texas, foreclosing on a property can be mega profitable.

Yet it amazes me that some investors I meet are terrified of a foreclosure. In fact, I just met a couple from California who would not invest in part because of the fear of getting a house back. I respect their position, but I know it’s completely wrong.

Here’s why:

1. I get the house back in better condition 95 percent of the time

I buy houses in San Antonio for 20 percent to 30 percent under market value, perform $20,000 in rehab and resell with seller financing. A typical deal will be:

  • $60,000 wholesale purchase price of a distressed home in a rising neighborhood
  • $15,000 in rehab — just enough to resell it
  • Resell at $89,900 with $5,000 down, 10 percent interest and a 30-year note

For example, I recently sold this house with owner financing after the investor did $10,000 in rehab:

new front

I upgraded the flooring, painted inside and out, added central air, leveled the foundation and added a third bedroom. Enough rehab was completed in this area (at low, wholesale prices) to resell the house in a week. However, the roof will need to be redone in a few years, and the kitchen needs more cabinets.

The owner has a lot of pride of ownership in his or her new home; for most, this is the buyer’s first house. So they make improvements, often $10,000 or more. Then, three years later, someone loses a job, and I have to foreclose.

In almost every case, the house has been upgraded by the previous owner. So next time, I will resell this house for $95,000 and $5,000 down again.
In almost every case of foreclosure, the house has been upgraded by the previous owner.

I have gotten a house back three times before and got $1,000 per month with $5,000 down each time. That is a great return on investment.

2. I can foreclose lighting-fast in Texas

When I have to foreclose, it’s an easy process in Texas. Although some sources say the entire process takes three months, in my experience, I get a house back in 60 days or even less. In a few cases, the former owner simply hands me the keys and I put it back on the market the next day.

On my last foreclosure, I spent $1,000 for the entire legal process and had it done in 45 days.
On my last foreclosure, I spent $1,000 for the entire legal process and had it done in 45 days.

I should note that foreclosing is not what I want to do. Once a family is 30 days behind, I call them and attempt to work it out. In many cases, a child got sick or someone lost their job.

I know their financial situation because they provided me with proof of income and assets during the qualification process. So, I try to get them to tap their 401K or other assets to get caught up and get them through this trying period. If we cannot work it out, the foreclosure proceeds.

3. I deal in volume, so some foreclosures are necessary

My investors and I buy hundreds of houses per year. There is little question that at some point, some percentage of those houses will be in foreclosure. It can be 5 percent in boom years, and 20 percent in recession years.

I accept and embrace that. Fortunately, San Antonio, Texas has a strong, stable real estate market with a diverse industrial base. There always is strong demand for affordable homes in my city — regardless of market conditions. Houses foreclose, and houses are quickly resold.
I accept and embrace that at some point some of my investment homes will be in foreclosure.

The foreclosures happen fast, I get $5,000 down again from every new buyer, and I continue to buy houses and owner-finance them. Even though I’ve done my share of foreclosures in the past 15 years, I still managed to financially retire in this business with $40,000 per month in cash flow.

So, don’t fear foreclosures in the real estate investing business. It’s merely part of the investing landscape and a golden opportunity to make more profits.

Case Study – 1219 Perez St.

1
$29,000 cash price, $7000 in rehab, 120 DOM, sold for $55,000 owner finance, 12% ROI

This house at 1219 Perez St. in the 78207 zip code is another example of one of our more affordable homes. This area is being revitalized,  but homes are still less expensive here than north of downtown.

It was bought for $29,000 cash by the investor, and resold with owner financing for $55,000. Only $7000 in rehab was done, leveled foundation, painted floor, painted in and out. No more than that should be done as it isn’t necessary for resale. Terms:

  • $5000 down
  • $550 per month
  • 10% interest
  • No prepayment penalty
  • No balloon
  • Final price: $55,000
  • 12% ROI

More Pictures After Rehab:

new kitchen new LR new room 2

Interested in Investing? Key Points –

  • $50-70k cash wholesale properties – mostly sold to California cash buyers
  • We qualify end owner finance buyers on job history and documented income per Dodd Frank rules.
  • All owner finance prices are FMV.
  • Typical terms – 30 year note, 10% int., $5000 down payment – varies depending on exact deal
  • Low foreclosure rate – resell to new buyer if needed
  • 10-13% ROI is typical return
  • 1-3 months to locate quality owner finance buyer
  • Tax/insurance payments are escrowed
  • 5-10k rehab, no long term property maintenance
  • We have completed over 1,000 of these deals
  • Contact us to learn more

Case Study – 2923 Colima Ave.

front 3
$20,000 cash purchase, $5000 in rehab, 65 DOM, sold for $39,900 owner finance (Fair Market Value), ROI 12%.

This is an example of our lower priced affordable homes. These houses will sell in our neighborhoods in San Antonio TX. It is a 4/1 on Colima Ave. in the 78207 zip code. It was purchased by the investor for $20,000 cash, which was well under market value. He had it repainted in and out and the door secured, and other minor fixes. That cost him $5000 total in repairs.

Houses in this range and location do not require major repairs and upgrades to resell.

We then sold the house with owner financing to a qualified end buyer. The buyer was qualified according to SAFE Act – documented income, tax returns, pay stubs, employment verified. All Dodd Frank underwriting rules were followed.

Terms:

  • $3000 down
  • $400 per month PI/TI
  • 30 year amortization
  • 10% interest
  • No prepayment penalty
  • No balloon
  • Final price: $39,900 (FMV)
  • ROI: 12%

Note: The final price for the owner finance buyer is FMV and DOES NOT constitute ‘predatory lending,’ which is illegal per Dodd Frank regulations. Sold comps in the neighborhood on properties of similar size, age and condition are approximately $39,900 to $49,900 – if elec and water work and roof is not leaking.

A CMA was run on similar houses within a two mile radius. Max value in that area for similar houses is $99,900 for an immaculate property that has been updated.

More Pictures:

WP_20150131_006 WP_20150131_011 WP_20150131_012 WP_20150131_013

 

Interested in Investing? Key Points –

  • $50-70k cash wholesale properties – mostly sold to California cash buyers
  • We qualify end owner finance buyers on job history and documented income per Dodd Frank rules.
  • All owner finance prices are FMV.
  • Typical terms – 30 year note, 10% int., $5000 down payment – varies depending on exact deal
  • Low foreclosure rate – resell to new buyer if needed
  • 10-13% ROI is typical return
  • 1-3 months to locate quality owner finance buyer
  • Tax/insurance payments are escrowed
  • 5-10k rehab, no long term property maintenance
  • We have completed over 1,000 of these deals
  • Contact us to learn more

Case Study – 3711 Southport Dr.

Front
$49,900 cash purchase, $11,000 in rehab, 90 DOM, sold for $89,900 owner finance, 13.8% ROI.

This property at 3711 Southport Dr., 78223, was purchased by the investor for $49,500 in late 2014. It is on the southside of the city. This was about 30% under FMV.

It is a 3/1 with a one car garage, and was built in 1957.

Central air was added, painted on the inside, and kitchen and bath rehabbed. Total cost: $11,365. Total investor cost was $60,865.

Using our unique owner financing system, this property was resold in four months to owner finance buyer that we found for the investor. The buyer maintains the property.

Terms:

  • $5000 down
  • $895 per month PI/TI
  • 30 year amortization
  • 10% interest
  • No prepayment penalty
  • No balloon
  • Final price: $89,900 (FMV)
  • ROI: 13.8%

More Pictures After Rehab:

lr 2 light kitch bath2 halls 2

Interested in Investing? Key Points –

  • $50-70k cash wholesale properties – mostly sold to California cash buyers
  • We qualify end owner finance buyers on job history and documented income per Dodd Frank rules.
  • All owner finance prices are FMV.
  • Typical terms – 30 year note, 10% int., $5000 down payment – varies depending on exact deal
  • Low foreclosure rate – resell to new buyer if needed
  • 10-13% ROI is typical return
  • 1-3 months to locate quality owner finance buyer
  • Tax/insurance payments are escrowed
  • 5-10k rehab, no long term property maintenance
  • We have completed over 1,000 of these deals
  • Contact us to learn more

Case Study: 604 West Hollywood Ave.

hollywood
Before Rehab – $51,000 cash purchase, zero rehab by investor, 90 DOM, resold for $80,000 owner finance, $804 per month, 14% ROI.
dasdf
After rehab, completed entirely by end buyer.

This house at 604 West Hollywood 78212 is in Beacon Hill, which is a rapidly appreciating area north of downtown by 2-3 miles. It was bought for $51,000 cash in October 2013 by the investor. It was very run down. Today it is worth $125,000 and mostly rehabbed, but not by the investor — by the end buyer. Terms:

  • $51,000 cash purchase
  • $80,000 owner finance price
  • Zero rehab by investor
  • $806 per month
  • 14% ROI

More Pictures After Rehab:

20140403_080937 20140727_134826 20140819_153126 20141017_121747 - Copy holl bath rev

Interested in Investing? Key Points –

  • $50-70k cash wholesale properties – mostly sold to California cash buyers
  • We qualify end owner finance buyers on job history and documented income per Dodd Frank rules.
  • All owner finance prices are FMV.
  • Typical terms – 30 year note, 10% int., $5000 down payment – varies depending on exact deal
  • Low foreclosure rate – resell to new buyer if needed
  • 10-13% ROI is typical return
  • 1-3 months to locate quality owner finance buyer
  • Tax/insurance payments are escrowed
  • 5-10k rehab, no long term property maintenance
  • We have completed over 1,000 of these deals
  • Contact us to learn more