Real Estate 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! 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 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 Leaving you a gross profit of $20,300 You had out of pocket material cost of $1,500 Carrying cost of $600, (Real estate taxes $300 &$300 Utilities) 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: The Horse Realtor: Wyoming Real Estate Agent Focuses On Properties For Horse Owners Cowboy State Daily Even a State-Linked Giant Can't Escape China's Real-Estate Crisis The Wall Street Journal $2.2 Million Homes in California The New York Times Real estate agent 'paid to stand there' after taking on controversial '$200,000 job' as side hustle: 'Bludge' Yahoo Finance Australia Massive Los Angeles real estate project has Hawaii connection Honolulu Star-Advertiser Erie County real estate transactions Buffalo News UTSA grad Stephanie Florez to pursue her real estate career in New York City The University of Texas at San Antonio Sarasota-Bradenton real estate pros don't see a big price drop coming Sarasota Herald-Tribune Midloch Investment Partners, Fountain Real Estate Capital acquire 123608-square-foot industrial property in Golden ... REjournals.com East Cobb residential real estate sales, April 22-26, 2024 East Cobb News Guthrie Center City Council to Consider Sale of City Owned Real Estate Raccoon Valley Radio Real estate firm Tishman moves into data centers, plans Frankfurt campus alongside Mainova DatacenterDynamics VIDEO | REAL ESTATE | Sneak peek at remodel as The Kettle starts to take shape washingtoncountyinsider.com Brooklyn real estate vets launch firm to build 10K housing units in five years Crain's New York Business Buying a home? Good luck. Here's why Rochester real estate is crazy Democrat & Chronicle Delaware real estate home listing prices are on the rise The News Journal The week's top commercial real estate transactions in Charlotte, Collier, Hillsborough, Lee, Manatee, Pasco, Pinellas ... Business Observer Property manager takes charge of downtown towers, Offices at Atria Sarasota Herald-Tribune Navigating Retail Real Estate Trends Globe St. Aspen Real Estate Snapshot, May 13 Aspen Daily News Montverde and the price of small town real estate WKMG News 6 & ClickOrlando Ask a Broker: No such thing as offseason in Aspen real estate Aspen Daily News Invesco Active U.S. Real Estate ETF (NYSEARCA:PSR) Shares Bought by Private Advisor Group LLC Defense World Real estate market accumulates a record stock of apartments Realnoe vremya FY2025 Earnings Estimate for Boardwalk Real Estate Investment Trust (TSE:BEI) Issued By National Bank Financial Defense World PGIM Real Estate buys six UK student properties from Unite Group IPE Real Assets STAR resource center Department of Taxation and Finance Mantella Corporation Welcomes Real Estate Professional Gavin Gong as Director, Investments Elk Valley Times REAL ESTATE | A look inside The Lofts at Cedar Lake on the campus of Cedar Community washingtoncountyinsider.com How the NAR settlement impacts future homebuyers WVTM13 Birmingham New Florida Law Roils Its Condo Market Three Years After Surfside Collapse - The Wall Street Journal New Florida Law Roils Its Condo Market Three Years After Surfside Collapse The Wall Street Journal Carey International Group Appoints Christopher Kane as Chief Investment Officer to Drive Expansion in Renewable ... SolarQuarter Is Boise Housing Market Booming? Expert Predictions on Rising Prices Norada Real Estate Investments Tampa industrial park home to Ball Corp. sells for $94.5 million The Business Journals Grand County Real Estate Transactions, May 5-11. Sky-Hi News Seven industry associations join forces to develop real estate carbon pricing strategy Workplace Insight Trump confidant and real estate investor says Newsom's California, New York economies are a 'disaster' Fox Business Billionaire Barry Sternlicht expects one bank failure per week due to real estate's 'fragile' loans Fortune Property transfers that took place in Greater Fall River Fall River Herald News David Auto owner's Main Line mansion finds buyer in under a week The Business Journals Room to grow: Why Austin needs more homes The Business Journals Influencers in Retail Real Estate 2024 Globe St. Lake Norman mansion in Cornelius put on market for $12M (PHOTOS) The Business Journals Refined Real Estate: Groovy Mercer Island home lists for $2,350,000 seattlerefined.com What is the real estate 'lock-in effect' in Rochester? It might cost you a lot of money. Democrat & Chronicle Inside Blackstone's Real-Estate Buying Spree As Valuations Plummet Business Insider Unpacking the Firestorm Over Blackstone's Real Estate Valuations Wealth Management Study finds Atlantans lost $1.25 billion in equity in real estate dealings with corporations WSB Atlanta 65% Stock Market Crash: Top Economists Share Scary Predictions for 2024 Norada Real Estate Investments The Boulder Bubble: Exploring the Factors Behind the City's Thriving Real Estate Market | About Boulder County ... About Boulder One New York Office Building Shows the Stress in the $20 Trillion Commercial Real Estate Market Bloomberg Real Estate Showdown: A Brownstone vs. a Farmhouse Boston magazine Real estate bubble: How Country Garden saves itself from its creditors • Table.Briefings Table.Media Massachusetts real estate transfer fees could lead to losses in Boston, other cities, towns: report Boston Herald |
RELATED ARTICLES
Subdividing - But NOT Land! Many people are familiar with the concept of sub-dividing a large piece of property into smaller lots. The same concept can be very profitable in other areas. The Real Estate Agent Alphabet Alphabet Letters after a person's name seem to bestow some kind of special prestige. PHD, MD, ESQ are common. What Are the Pitfalls of Marketing a Property Before Its Ready? Selling quickly is a high priority for some home sellers. A job transfer can prompt the need to relocate on short notice. Maintaining Small Town Charm In An Ever-Changing World Virtually any state in the country has the appeal of multiple small towns. Ask almost anyone who lives in small town why they are here and they'll tell you they enjoy the small town feeling while being close to all the conveniences of a larger city. How Do I Implement The Lease Purchase Plan? Well, as we have discussed in previous newsletters first you have to set up goals for yourself, both long term and short term. Don't forget these goals define how your business is run. Selling Your Home? A Warning About Attachments Before you list you home for sale, determine what you don't want to leave behind.Our friends sold their home for full price and moved out a few days before closing. First Impressions Will Sell Property Fast! First impressions count, buyers will have already formed an impression before they step into your property. A well-kept garden, pathway and fence, plus a freshly painted front door are immediately appealing, whereas a scruffy outdoor space with a litter bin outside the front door may turn many prospective buyers away. So, You Wanna Buy Pre-Foreclosures? So you wanna buy pre-foreclosures? or at the courthouse steps? So many people ask us about this. Here's our '30 second seminar' on it. Real Estate Investing Is A Better Gamble Than The Lottery Real estate investing begins when you move to the starting point.Get ready. How To Realistically Get Started As A Real Estate Investor When it comes to real estate investing, most beginners find themselves with plenty of desire, a little bit of knowledge (from books, seminars, online message boards or something like that) and in most cases they have little or no money to get started with. Does this sound like you? If so you are not alone. RESPA: The Real Estate Settlement Procedures Act The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. One of its purposes is to help consumers become better shoppers for settlement services. Renting Versus Buying A Home Renters are often in a quandary as to whether it makes sense to continue renting or buy a home. Buying a home makes more sense, particularly when taking a long-term view. Buying a Home: The 5 Biggest Mistakes that a Home Buyer Makes As a Professional Real Estate Inspector I get to see and hear the right and wrong things people do when buying a home. These 5 tips will help you choose the right Real Estate Agent the first time. How To Negotiate A Higher Price For Your House Negotiation is where many FSBO home sellers really have problems. The wrong attitude or a slip of the tongue could cost you thousands. Homebuyer Heaven Can't Possibly Last With interest rates at record lows over the past year, there's really only one way for them to go, the only question is when. Most experts agree that rates will remain fairly stable in the short term, at least until the end of the year, and some believe they will even decrease slightly. Expenses of Home Ownership Hopefully all goes smoothly when you purchase your home. In your anxiousness to become an owner it may not have crossed your mind and no one tells you, your'e not done spending money on this transaction. How You Will NOT Make Money in Real Estate We all have seen some book called "How I Turned my last dollar into $1 Million by buying real estate in my spare time". Some of us even bought such books on an impulse with high expectations. The 21st Century Way To Build Equity Here to stay and firmly established in the U.S. Negotiating A Short Sale - The High Road to Huge Foreclosure Profits Buying foreclosures can be extremely profitable for real estate investors. However, most of these homeowners are mortgaged to the hilt. 10 Things You Shouldnt Do When Youre Buying a Home Home Buying Don'tsYour home buying process is well underway. The sellers accepted your offer to purchase. |
home | site map |
© 2006 TIGER MEDIA |