Real estate profits are created every time we buy, fix and flip a house. Real estate profits are created every time we execute a lease option. Lease options sometimes create real estate profits twice; once when you get your option consideration and once when your tenant/buyer exercises their option and cashes you out. Each of these events can produce a healthy check. Whenever you get one of those nice paydays, have a plan for it, don’t just let slip through your fingers…remember you’re in the wealth building business…so do it! Here’s a formula one of my mentors shared with me and I’m happy to pass it along to you…
10% to your church or favorite charity
You’ll get it back many times over. Some people say you should give til it hurts. I think we should give until it feels good!
10% to splurge on your family
Their love and support helps you succeed. Most entrepreneurs tend to be pretty intense at times and single minded at others. Celebrating your successes with loved ones will only make them more supportive as you grow your business.
10% for continuing education
Keep investing in your skills! Every dollar you invest in your education generates a huge return. While my experience is anecdotal, I anticipate about a 1000 fold return on every dollar I spend on education.
70% to reinvest in the business
I’m not saying don’t pay your bills. But I’m recommending you don’t go out and buy the new car, the new boat or some other, as Robert Kiyosaki calls them, “Doodads”. Invest in the growth of your business by increasing your marketing and improving your ability to do deals! Use those real estate profits to build wealth and one day you might be truly amazed at your results!
Imagine working with sellers where you don’t need to secure bank financing, hard money or large down payments. Better yet…what if price were no object? How many deals could you do if cash, credit, or price didn’t matter? Imagine doing safe, profitable transactions that can put cash in your pocket fast—no waiting for mortgage approvals for your buyers, appraisals that fall short or seasoning because you haven’t been on title long enough.
This market has a lot of people spooked, especially the people outside our industry; a few on the inside too. As I talk with my fellow investors I hear a common theme…fear. Fear of losing money; fear of not knowing what to do or say, fear that values will fall further…FEAR…FEAR…FEAR! Believe me, I do understand. This market hasn’t seen its’ equal in many generations.
What if you knew how to eliminate the fear, take effective action, mitigate risk and start doing more deals and in a matter of weeks or months rather than standing on the sidelines or waiting years to jump in!
This unprecedented market brings with it unprecedented opportunities. If you don’t want the risks associated with owning properties…don’t own them. Instead, learn how to control them. That’s right—control without ownership can be a formula for financial success. No money? No credit? No problem. If you’re curious about lease options you are in the right place. John D. Rockefeller is credited with the statement, “Own nothing, control everything.”
Using a simple step-by-step plan you can learn and implement the lease option technique for buying and selling. You’ll control properties and produce income without risks brought on by the burden of property ownership. Options can be used to simply control a property but when coupled with a lease can produce multiple income streams.
This is the ideal market for using leases and options because sellers need to sell but can’t compete with the REOs and Short Sales. With 75 to 80% of the deals out there being distressed properties sellers are increasingly looking for alternatives. The best part of these transactions is that they are a win/win/win…the seller wins, the buyer wins and the INVESTOR wins. It doesn’t get any better than that!
On Saturday May 14th Central FloridaRealty Investor Association is hosting my NEW workshop Lease Options Made Simple. We’ll examine how to locate the best candidates, how to bring up the subject of doing a lease option that grants you control of the property and how you can market it quickly to create a check and monthly cash flow too. The best part is you can use this technique to create long-term wealth.
So join me on Saturday May 14th from 9:00 to 4:00 at CFRI’s Lake Mary education facility. For more info go to www.CFRI.net.
Three major banks are freezing foreclosures, and in turn, are giving distressed homeowners extra time (often months) to remain in their homes and stall the process of being removed from their home.
However, this new development also is threatening to gridlock already fragile home sales in a fragile market.
REOs (“Real Estate Owned”) properties comprise nearly 40% in the Florida market, and actions taken by Bank of America, GMAC, and JP Morgan Chase could prove to be a major blow to this battle-hardened segment of the residential real estate market.
Right now, REOs are one of the few types of property that is selling. As this process gets slowed, the housing recovery will further be delayed. However, for investors, there is a small silver lining. The window of opportunity to continue picking up deals at historically low prices will be extended. For investors getting started, that means more time to learn the ropes. And for experienced investors, it’s simply more time to do what they already know is working.
As reports of foreclosure sales that are being stopped in their tracks before closing, buyers are being shut out as the banks try to resolve issues brought on by “robo-signers” and unverified paperwork.
Many banks have put the brakes on foreclosure proceedings after it was discovered that personnel had been signing thousands of legal documents monthly without verifying case details. These documents contained critical details to each property, such as the amount owed and owner of record. The fallout from this discovery has opened the floodgates, with people nationwide asking if the paperwork is tainted by forgery and fraud.
There is no definitive consensus on when this issue will be cleared up. As it plays out, a slowdown in the bargain basement prices from bank-owned properties will further depress existing home sales. And so one of the hottest techniques in real estate investing now runs the risk of going cold.
So, what’s the best way to proceed in the face of the unknown? Educate yourself. This fiasco sheds light on why it’s so important to stay up-to-date on industry issues. Things can change at any time, and the successful investor is always prepared to change directions to move with market conditions.
This is why I emphasize “transaction engineering”. Once you have the tools and confidence to work directly with homeowners and craft creative solutions, you hold the key to your own destiny. When the banks falter, you can keep going. When the market changes, you can be excited to take advantage of new opportunities. Most importantly, you get the staying power to remain in the business and build a portfolio for the long-term.
Are you prepared for anything the market can throw at you? If not, take a step in the right direction and learn how to successfully invest without bank interference by “becoming your own bank!”. On October 23-24, I’m hosting the REI Rainmaker Retreat, an event focusing on alternative financing where you can learn how to succeed in a troubled economy. You’ll learn how to leverage creative financing, notes, seller financing, subject-to, and more.
The window of opportunity for great deals has been extended, but it won’t last forever. It’s time to take control of your future, and I hope you’ll join us.
You may be asking yourself, “What’s a sandwich lease option?” It’s an incredible financial instrument for creating profits without ownership. Let me explain.
It gets its name for the way everything is structured between the seller, you (the investor), and the tenant-buyer. You step in and negotiate a long-term option agreement with the seller, which gives you the right (but not the obligation) to close on the property within 1-5 years. Often, you also negotiate in the ability to assign the contract, and to let someone else other than you live in the property.
You then go find a potential tenant-buyer, perhaps someone who is a good person that has had a few financial knocks. Individuals who don’t qualify for traditional financing are prime clients for this sort of transaction. Often they will make ideal homeowners, but simply need a few years of documented on-time payments to help repair a spotty credit record. You then place them in the property with your own option agreement. If you structure it correctly, you can earn a spread on both the sales price and monthly payment amounts that you make to the original seller.
This is, of course, a highly simplified explanation of sandwich options. But my intent it to show you how it is very possible for you to start earning money through sandwich options.
By targeting areas with “pretty” houses in good neighborhoods, you will vastly increase the potential number of buyers you can attract. Since you don’t actually own the home, finding properties that are already in good condition is paramount. To make the most of your investment dollar, you will want to spend most of your money on marketing rather than repairs and clean-up. Additionally, properties in nicer neighborhoods minimize your risk exposure, as you won’t have to worry as much about vandalism or depreciating home values.
Sandwich options are an ideal strategy for the new investor because they carry limited risk and great upside potential. Further, they are an ideal match to the current market conditions. Motivated sellers and potential buyers with damaged credit are much easier to find. This technique of options has the potential to earn you a nice sum of money, but it does require work. Steve Zehala will be sharing with you a few other techniques that leverage sandwich lease options on October 23-24 at the REI Rainmaker Retreat. As with any investing technique, you need to find the right strategy that works best for you, learn it inside and out, and most importantly, TAKE ACTION!
Every day, I have would-be investors, real estate professionals, and others ask me about creative financing. It’s a topic which always generates a lot of curiosity, from investors and non-investors alike. Since it applies to nearly everyone, it’s a universal conversation starter. Folks from all walks of life are familiar with “the current financial crisis”. When you open the door to a converstaion by stating you’re involved in the real estate industry, one of the most frequent questions you’ll hear is “The real estate market…isn’t it doing terrible right now?”
What a fantastic opportunity for you to explain what you do! You can respond, “Actually, these are the perfect conditions for creative financing, which is what I specialize in. Most people wanting to buy a house have little cash, and can’t obtain a loan due to poor credit. And people trying to sell their homes are faced with rock-bottom prices, high commissions, and a really limited pool of potential buyers. With the creative techniques I use, I can leverage what cash or resources buyers and sellers have, and create options that help everyone out.”
You’ve turned the conversation around from one of gloom and doom to one of infinite possibilities. Today’s real estate investing market is budding with opportunities for creative financing.
The next question is often “Ok, how do I craft a creative financing deal?” That’s a great question! Below I have listed five prime situations that are ripe for a creative financing solution. Always be on the lookout for owners in these situations:
- A property owner who wants to avoid or postpone paying capital gains taxes on their profits after a sale
- Someone who would be forced to pay a penalty if they pay off their current loan early
- Anyone who is in a distressed personal situation which prevents the regular maintenance of the property, leaving it in poor condition
- Someone who needs to sell a property ASAP, but has little or no equity
- An owner who is tired of dealing with the headaches, hassles, and stress of their property
There are many more situations which you can look out for, but these have the potential to be the most lucrative. Some key hallmarks which identify these situations are: “bring all offers”, “investor wanted”, “handyman special”, “creative offers accepted”, “seller financing”, “owner motivated”, “owner will carry”, and “lease option available”. If you want to test the waters, try checking out Craigslist.com and entering some of these terms, and see what pops up. You’ll be amazed at the opportunities that are hiding in plain sight!
Once you have the lead, the next step is to create the offer. Not sure where to start? You’re not alone. There’s much to consider when working to create a win-win transaction for the buyer, seller, and most importantly, YOU! As the real estate investor engineering the deal, you have a lot of responsibility on your shoulders. The silver lining is that you stand to get paid handsomely for your knowledge.
Since I get asked frequently how to get started in creative financing, Central Florida Realty Investors (CFRI) has asked me to hold a full-day seminar showing how I personally create profitable deals. Registration is open through this week, but you’ll have to register before Wednesday if you want to get the early-bird rate!
Click here to learn more or register
We’ll talk how to find the owner’s motivation for selling their property. Then, we’ll review how to construct a creatively financed offer that meets both of your needs. Once you know how to invest in real estate using creative financing techniques, it’s like you hold the keys to the kingdom. You become a financial alchemist, able to take formulas for many different types of deals and mix them to get the perfect potion for each seller. So, get registered today! The next time someone asks you, “The real estate market…isn’t it doing terrible right now?”, you’ll smile and know exactly what to say next.
To your success…
You can help build our next program…are you ready? You know I have a win/win philosophy for deals, and that’s what I have for you today! I want to work with up to five small groups to gather feedback on my current program “Buying Without Cash or Credit“, so I can evolve it into “The Ultimate Creative Financing System.” I am currently in the process of taking my home study programs to the next level, and gearing them for a national audience. And the best way I can think of to improve the content is to get feedback from you!
What Do I Get?
You will receive a 50% discount on “Buying Without Cash or Credit“, which retails for $697, and includes both audio CDs and DVDs that will be shipped to your home. You’ll receive a copy of “The Ultimate Creative Financing System“, which will retail for $1497, for FREE as my way of saying thanks for participating. Additionally, you will have access to a one-day exclusive training on my favorite subject, Creative Financing. Others may get to participate for $497, but honestly, I haven’t decided if I’ll invite anyone else. Either way, it’s yours as my way of saying thanks.
What Is Required Of Me?
I ask for your frank feedback to help me serve you and your fellow investors better. You will be required to purchase “Buying Without Cash or Credit” with your 50% discount code. Over the next 45 days, you must listen to the audio and view the videos of the current program at least three times, and make notes on the following:
- Examine each technique and comment on its clarity and ease of understanding
- Comment on how each segment can be more effectively communicated to make it user-friendly
- Ideas on tools which would make the program more beneficial
In addition, there will be two mandatory online surveys, which you will be required to complete in order to receive your free copy of “The Ultimate Creative Financing System“. There may also be a conference call (or two).
Is There A Deadline?
Yes. The new product must be ready for delivery by November 1st, so time is of the essence! Due to the many questions I’ve received, I wanted to give people a chance to learn more. Therefore, I am extending a deadline to get involved to Saturday, August 28th at midnight. After that, we will start working with those who stepped up to participate.
I’m Interested. What Should I Do Now?
Add a comment to this post below, and include your email address. Don’t worry, we will keep the information private! Only we will see your request, and we’ll send you a discount code and URL to purchase “Buying Without Cash or Credit“. You’ll be on your way to earning over $2,300 in bonuses as my way of saying thanks!