Real Estate Information

Luxury Real Estate Information


Rancho Palos Verdes, California Homes
Palos Verdes, California Homes
South Bay, California Homes
Luxury Mexican Beachfront Homes

Featured Properties


Oceanfront Estate Near Trump National

Related Information


Loan Information
Real Estate Information
Mortgage Refinance Information

Real Estate Investing with Bad Credit!


By being creative, you can play the game of real estate investing by using what is called Option's investing.

This is just one technique of the Option's strategy of investing but can be a power tool in your investors toolbox to help you control more real estate and build wealth.

An option is an agreement to you from the seller that gives you the exclusive right to buy a property during a specified time and at a predetermined price but does not obligate you to make the purchase - This is why it's called the Option agreement.

You option to buy - You option not to buy.

Option investing works when you want to control more real estate with limited out of pocket cash or credit and works if you:

Have no credit!
Can't pay cash!
Can't get a loan!

I call this the "SWEAT OPTION".

The sweat option works well if you have the ability to do the repairs yourself.

Your key's in making a deal like this are:

You need to know the basics of real estate investing
You need the forms to make this happen
You need to know the market area
You need to know the laws in your state
You need to know how to determine the value of the subject property
You need to know how to do a title search

Most importantly you need to know how to find sellers that are motivated enough to work with you on this strategy of investing.

I recommend that you farm out your market area looking for properties that are what we call in the industry FSBO's (For Sale by Owner).

Go to your local library and start your research by looking at old newspapers starting with newspapers that are 90 days old and work your way through the FSBO's section making a list of possible deals. Working on a list of 30 or so.

Call and see if the property is still on the market, if so make an appointment to see the property! You will find that none owner occupied properties work the best and you are looking for properties that can not compete well with other homes do to repairs that need to be done.

Let's say the seller has a property that is worth $100,000 after the repairs.

I like using a 5% rule for repairs - If the value of the property is $100,000 after repairs, I do not want to spend more than $5,000 or 5% in repairs.

I would negotiate say an option purchase price of $80,000 for a period of 6 months or more and in the option agreement to perform the repairs at my cost to be my consideration for the option of purchase or should I say the $5,000 in repairs, materials cost and labor to be considered as credit towards the purchase of the property (My down payment) and what ever monthly payment we agree to and credit amount of that monthly payment. So let's say we agree to pay $600 a month with $100 a month credit towards the purchase.

You start you're repairs and complete them in 30 days or less and let's say you purchased $1,500 in materials.

Now you place the property on the market because you have the option to purchase "You have taken control of the property with your option".

Let's say this deal has taken you 90 days from the beginning to the end.

You find your buyer let's say at a great deal of $95,000 - $5,000 below market value at this point you would simply exercise your right to the purchase option and do a simultaneous close.

Now let's run the numbers

Your option purchase was $80,000
Your option credit of $5,300 (Repairs, materials cost, labor & monthly credit)
Your purchase price after credits $74,700
Your buyer purchase price of $95,000

Leaving you a gross profit of $20,300

You had out of pocket material cost of $1,500
You had 3 payments of $600 each with $100 for the credit purchase with an out of pocket of $1,500

Carrying cost of $600, (Real estate taxes $300 &$300 Utilities)
Advertising cost $300
Closing cost $1,300

Your net profit $15,100

You simply took control of a $100,000 property for $3,900 (payments, materials, utilities, and advertising) and turned a profit of $15,100 in 90 days!

Look at it this way you can make it a cash purchase at $80,000 and take control of one property or be a little creative and take control of the same property for less than $4,000. Both conservative and creative deals work in the world of real estate investing.

Good luck and I hope this will help some of you!

Copyright 2005 JMichael Investments

You have permission to publish this article electronically or in print, free of charge, as long as the bylines are included. A courtesy copy of your publication would be appreciated - send to John@jmichaelrei.com

"Join me in the Bahamas or Marietta Georgia"John Michael - Investor/REI Teacher

Join me on a Bahamas Cruise: http://www.realesmartplanner.com

Join me in Marietta Georgia: http://jmichaelrei.com/html/rei_seminars.html

My site: http://www.jmichaelrei.com/

Email: John@jmichaelrei.com


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Forbes

Spring's 2018 Real Estate Market Is A Good News Bad News Story
Forbes
The Spring 2018 real estate market is a good news bad news story. A recently released report from Arch Capital MI points to affordability slipping, inventory declining while interest rates and housing prices rise. Key findings from the Arch Capital MI ...



Forbes

The Blockchain For Real Estate, Explained
Forbes
There is a lot being written about blockchains, bitcoin and related technologies, and for many real estate professionals, this is part of a brave, new, confusing world of technology. Like the original internet, the blockchain is a revolution in ...



Daily Beast

Why Should Hannity Have to Disclose His HUD-Backed Real-Estate Empire?
New York Magazine
Sure, they had “occasional brief conversations” about “legal questions,” which “exclusively, almost, focused on real estate.” And Hannity didn't pay him? Correct, he “never paid Michael Cohen for legal fees.” But they both think this fell under ...
Hannity Owns Real-Estate Empire, Linked to Shell CompaniesDaily Beast
Sean Hannity Reportedly Owns a Real Estate EmpireSplinter (blog)
Sean Hannity Linked To Multi-Million Dollar Real Estate EmpireTPM
The Real Deal -Washington Examiner -AlterNet
all 104 news articles »


USA TODAY

Sears CEO Eddie Lampert offers tentative deal for real estate, Kenmore
USA TODAY
Sears Holdings CEO and hedge fund investor Eddie Lampert has offered to potentially buy the distressed retailer's real estate, Kenmore brand and other assets. Lampert's hedge fund disclosed Monday that it had sent a letter to the retailer on Friday ...

and more »


Fortune

Climate Change Is Already Depressing the Price of Flood-Prone Real Estate
Fortune
New research shows that real estate properties in areas affected by extreme weather and sea level rise are losing value relative to less exposed properties. The effects are already substantial, but they may point to a looming collapse as climate change ...



Sarasota Herald-Tribune

REAL ESTATE PEOPLE
Sarasota Herald-Tribune
Jackie Avenia has joined Sunset Business Brokers International LLC, in Sarasota. She has been a licensed Florida real estate agent since 2015, and recently acquired the Seniors Real Estate Specialist designation. She works in residential and commercial ...



Buffalo News

Erie County Real Estate Transactions
Buffalo News
Following are real estate transactions over $5,000 as listed in records of the Erie County clerk's office for the week ending March 16, 2018. ALDEN • 13185 Broadway St., Paul R. Hunt; Pauls Bike&sports Center to Eggink Rei, $275,000. AMHERST • 22 ...



REAL ESTATE DEALS
Sarasota Herald-Tribune
REAL ESTATE DEALS. Monday. Apr 23, 2018 at 2:01 AM. LEASES. Harvest Tabernacle of Sarasota leased 1500 square feet at 2052 Princeton St., Sarasota, from Ivy Business Center LLC. Rico Boeras, of Sarasota Commercial Realty LLC, handled the transaction ...



Updated presentation for investors of INVL Baltic Real Estate
GlobeNewswire (press release)
INVL Baltic Real Estate announces an updated presentation that will be used for the meetings with investors. Compared to the presentation, which was published on 21th December 2017, the Company informs that the information related to the terms of the ...



Charleston-area commercial real estate sales
Charleston Post Courier
James Dingle of Coldwell Banker Commercial Atlantic represented The Corner of Awendaw Associates LLC in its $375,000 sale of a 2.5-acre lot at 5030 Highway 17 to Charleston County. Goose Creek. Jack Owens of Lee & Associates represented Mims Amusement ...


Google News

home | site map
© 2006 TIGER MEDIA