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: L.A.’s Real Estate Upfronts Reveal Penthouse A at Rosewood Residences Beverly Hills Hollywood Reporter Real estate mogul cautions about avoidable mistake when buying a home, explains how to avoid 'drowning' Fox Business Coloradans negotiating lower fees for real estate agents with new law on horizon Colorado Public Radio Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties May 19, 2024 edition MassLive.com Routt County real estate sales at $17.6M for May 9-15 Steamboat Pilot & Today Rudy Giuliani Slashes Price on His New York City Apartment to $5.7M Realtor.com News Real estate transfers: May 17, 2024 RiverheadLOCAL London Real Estate Is About to Get the ‘Selling Sunset’ Treatment Hollywood Reporter Mid-May Greenwich Real Estate Market Report Greenwich Sentinel Real Estate Newsletter Articles this Week: Housing Starts Increased to 1.360 million Annual Rate in April Calculated Risk Dodge County Real Estate Transfers Fremont Tribune The Michael Houck Real Estate Guide for May 19 Oil City News MCB Real Estate Revives Long-Awaited Viva White Oak Mixed-Use Project Source of the Spring Washington state ahead of the game as lawsuit rewrites real estate commission rules - Puget Sound Business Journal The Business Journals Yes, there are other coastal Delaware towns besides Rehoboth Washington Blade Dutchess County, NY real estate 2024: What's on the market for $579K Poughkeepsie Journal Baltimore real estate: 4 waterfront condos for sale The Baltimore Banner Home Prices Hit Record Highs in April 2024: Trends & Forecast Norada Real Estate Investments STAR resource center Department of Taxation and Finance Real Estate Briefs: Lakeside homes, news condos, and more news Rough Draft Atlanta REAL ESTATE | UPDATE | Johnson Bus selling lot for new West Bend Fire Department No. 1 washingtoncountyinsider.com VIDEO | REAL ESTATE | Construction finally underway for Taco John's in West Bend, WI washingtoncountyinsider.com Revolution in real estate: How the NAR settlement is changing the game Eden Prairie Local News James Quinn's Data Center Advisory Expertise at JLL Drives Innovative Real Estate Solutions for Global Corporations Markets Insider Oceanport's Denholtz recognized by commercial real estate organization themonmouthjournaleastern.com Westmoreland County Real Estate Transfers | Real Estate | latrobebulletinnews.com latrobebulletinnews.com OT Real Estate Spotlight of the Week: 2115 Sheridan Place The Owensboro Times Innovative Leaders Vanderstraaten and Rohrman Inducted into North Texas Commercial Real Estate Hall of Fame ... dallasinnovates.com Here are recent property transfers up to $1.28 million St. Albans Messenger Real Estate Mogul Grant Cardone Closes Largest All-Cash Multifamily Deal In South Florida This Year Yahoo Finance Billy Joel spends over $10M for sprawling East Hampton pad with horse farm, neighbors other A-listers New York Post Robert Willett may be targeting female Realtors in Northeast Ohio Akron Beacon Journal My Co-op Neighbor Never Pays His Maintenance on Time. Can We Make Him? The New York Times China Says It Will Start Buying Apartments as Housing Slump Worsens The New York Times Navigating Northern Virginia Real Estate: An Insight Into Rhonda Campbell's Bespoke Approach Grit Daily Refined Real Estate: Unique Leschi home with lake views lists for $1,395,000 seattlerefined.com Number of homes for sale in Metro Atlanta increased significantly, real estate brokerage says – WABE WABE 90.1 FM Real Estate Transactions for May 18-19 | News, Sports, Jobs Nashua Telegraph What's real estate wellness? Fortune Ellison sues real estate broker Chad Banken over alleged schemes involving contracts for deed Star Tribune Billionaire Frank McCourt raises his hand to buy TikTok Business Insider Connecticut real estate law changed after MV Realty investigation Eyewitness News 3 Connecticut real estate law changed after MV Realty investigation Eyewitness News 3 KKR Real Estate Finance Trust Inc. (NYSE:KREF) Given Average Recommendation of “Moderate Buy” by Analysts Defense World Sean Bloom Investments Announces $2B Real Estate Project in Las Vegas InvestorsObserver Do starter homes still exist? Here's what NJ realtors said NorthJersey.com Edgefront Real Estate Investment Trust (TSE:NXR) Forecasted to Earn FY2024 Earnings of $0.73 Per Share Defense World Berkshire County Real Estate Transactions for April 29-May 3 Berkshire Eagle First Capital Real Estate Investment Trust (TSE:FCR.UN) Share Price Crosses Above Two Hundred Day Moving ... Defense World Bienville Realty: Commercial real estate Fox 10 News Letter: Clarifying changes to real estate industry Morgan Hill Times EG Real Estate: 18 Opens This Weekend – East Greenwich News East Greenwich News Local couple buys Pat Burrell's former Center City penthouse for 38% under original asking price Philadelphia Business Journal Home listings are on the rise in southern Colorado, while other indicators show a slowing real estate market Colorado Public Radio Did Fort Worth’s real estate market really ‘bottom out’? | Fort Fort Worth Star-Telegram Southern fast-food chain Cook Out buys Tampa real estate Tampa Bay Business Journal New Rules for North Texas Real Estate Agents Creates Uncertainty Dallas Observer Artis Real Estate Investment Trust (OTCMKTS:ARESF) Sees Significant Growth in Short Interest Defense World Busch relative settles squabble with Clayton investors over real estate trust St. Louis Post-Dispatch |
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 |