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The Art of Creative Investing
| | Friday, April 29, 2005 @ 10:21 AM EDT
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Contributed by: John Michael
John Michael Properties
Read more archived articles about Buying
Many investment opportunities are simply passed up when we as investors fail to "Think out of the box"!
In the world of real estate investing "CASH" is king, but the hard fact is not all of us have the cash, credit or even financial backing to do a deal so what can you do?
Do you just give up?
Do you forget becoming an investor?
Truly the choice is yours, if you give up because of the lack of funds you will simply never fulfil your dream! You simply let the lack of keep you down!
When one has a dream - follow the dream! You are the one that can turn a dream into reality!
Remember the movie "Field of Dreams" BUILD IT AND THEY WILL COME!
This is not just a movie, It's a reality see:****Must participate a while before posting URL's*** />
Do you have that small still voice telling you to go the "DISTANCE"?
To be a success in real estate you need to:
Dream your dream
Put your dream down on paper
Set up a business plan around your dream
Set up short and long term goals around your dream
Join a real estate investing Club
Research and Study postings at real estate investing forums
Search out real estate investing books at your local library and study them
Search out used bookstores for real estate investing books
Search out the laws in your state to determine what you can and can't do as an investor
Once you have completed the above you are now ready to take your dream to the next level.
Search out two or three real estate investing strategies you want to use that fall into the 9 steps I've listed above.
Now you need to take some courses and or seminars on your strategy of choice!
Learn how to use contracts and what types of contracts are used in your state.
Network with any one having anything to do with real estate!
Find someone willing to mentor you!
You must know your market area
You must understand your market area
You need to know the IN's and out's of what form of investing you plan to do
The above are just some simple steps to turn your dream into reality!
The Reality of a dream and what "Thinking out of the box" can do for you!
Independence, MO - 3bdr - 2 bath - 2 car garage / Seller had a job transfer & had to move ASAP.
1st Mortgage $60,599
2nd Mortgage $15,386
I bought the house Subject To! Owner gave me a WD and I started making the payments of $368.41 on the 1st mortgage & $130.88 on the 2nd mortgage.
I sold the property for $89,900 on contract for Deed in 60 days
$3,500 down & $604.12 @7 1/2% for 30 years
My Return: Paid -$998.58 Down payment +$3,500 = $2,501.42 (Half to owner)
Payment =$499.29 * Contract Payment =$604.12 * Positive cash flow $104.83 (Half to owner)
In my pocket $252.13 up front & $52.42 per month x30 year = $18,869
Why Would A Seller Sell To Me - The seller was motivated
I found his pain and provide him the best solution
I actually increase his credit score
I gave him $1,250 cash in pocket
I make all his payments
I send him a check once a year for $629
You still can profit on deals that have no equity by knowing what the average rents are in the area and if they exceed the mortgage payment, you can great a positive cash flow.
I did this deal on a property that had a retail value of 497k in California with an appraised value of 562k and the monthly payment was $3,426.31 and she owed 510k and the average rent's in the area pulled $4,750 and it cost me $10, 800 to bring her current and I gave her another $5,000 for the deed.
$10,800 to bring current
$5,000 for the deed
$5,700 for carpet and paint
$750 for other cost
Total out of pocket $22,250 to take control of a 500k plus property based on appraised value
I did a lease option for 5 years at a lease option purchase price for $549,000 with 25k down and $4,500 a month with 25k towards the purchase and $500 a month credit towards the purchase of the home.
This produced me with $2,750 from the down payment
I get $4,500 a month less monthly payment of $3,426
Leaving me with $1,074 less admin fee of $250 with a positive cash flow of $824
By thinking creatively, you too can succeed as a real estate investor.
"When you arrive at your future, will you blame your past?" By Robert Half, Entrepreneur, Executive
Note: John Michael is the author of many guides that can help you become more successful as an investor. See http://www.thecreativeinvestor.com/ChanPart-JohnMichael.html
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