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| Real Estate With No Money Down, Part 2 |
Here's a way to profit from real estate with no money out of your pocket that's a winner for everyone involved.
Find a vacant residential property that needs work. Instead of tying up your money buying it and dealing with the hassle of contracting the work (or spending all your spare time on it), tell the owner you'll lease it at 25% below market rent for a certain period of time, with an option to buy it at the end of that time, also at a percentage below market. If the property is the probable headache to a long-distance owner that seems likely, he may take you up on it.
Then, put a pulls-no-punches classified ad in the paper. It could be along the lines of "El |
Dumpo! Rent-to-Own, $0 down, You fix, 555-1243." You will get calls; screen the caller's background to see if he can actually do the work that's needed. Tell him you'll charge him market rent, but will not let the person move in until the work is completed, because the work won't get done otherwise. At the completion of work, his payments will be deducted from the sales price, which will also be at market.
It's a win/win/win; the new buyer gets in with only his sweat as equity, the original owner gets to unload a headache, and you get the difference between the percentage below and the market rate for taking the initiative and overseeing the deal.
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note: When the work is completed and the new buyer is ready to take ownership, sell him your option, and let the paperwork reflect that he bought directly from the original owner. This will avoid the expense and hassle of 2 closings, as well as a potential capital gains hit for you if you'd held the option for more than a year.
This is just another way to invest in real estate with no money down of your own. It's a good creative exercise, and a profitable example. But, when you're thinking this way, remember that you don't want to put yourself in a situation where you make foolish choices for lack of cash flow--like renting to a lousy tenant or making cheap repairs to a |
property. Both will cost you more than they're worth in the long run. Be creative because it's your strategy, not out of necessity, so you're never tempted to be penny wise and pound foolish.
About the Author: Lynn Stonebraker has been profiting from real estate since 1987. Get free weekly training in her newsletter, available at http://www.realestateinvestinginformation.com
Source: www.isnare.com |
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