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Hi. Real estate investing strategy question. - http://www.dealmakerscafe.com Forums

Original message

Steve

"Hi. Real estate investing strategy question." , Tue 26 Sep 08:29

Hi,
I've studied several real estate book and home study courses. I understand that each author teaches a different philosophy. I don't have the time to become a landlord and deal with day-to-day management problems. I like the idea of building cashflow from using wrapmortgages and installment land contracts.

What strategies does everyone use here and why?

Thank you, Steve.

Replies:

Dealmaker
Moderator

"Re(1):Hi. Real estate investing strategy ques" , Tue 26 Sep 18:50

Hi Steve:

Welcome to DealmakersCafe!

I rehab & retail, rehab & rent, and buy as many as I can get buying "subject-to the existing mortgage" and Land Contract with an exit strategy of offering owner financing.

My rental market & rehabbed retail are very good. Even though the over-all retail market is soft. I find my rehabbed houses with new everything are in demand because everything is usually under warranty and they have no sign of previous occupants.

Using Land Contracts and buying "subject-to" is probably the most attractive way to get involved with the minimum of involvement.

Dealmaker

Jackie

"Re(1):Hi. Real estate investing strategy ques" , Tue 26 Sep 17:55

Hi Steve,

When I first started all I did was find junker houses and flip them to rehab investors making a quick $3,000 - $10,000 on each deal.

My greed glands kicked in and after a year or so I started rehabbing these junkers (not me personally). While the money is good, it's NOT a picnic. There are more hassles to deal with than being a landlord.

So now my main strategy is like Lynn's. I buy pretty houses subject to the mortgage. They needed very little, if any, work. Then I sell them with either a lease option or a contract for deed -- thus creating cash up front, monthly cashflow and a nice back end. I really don't care if they ever cash me out though - because my goal is to keep building up cashflow.

I do about a house a week.

I still do a rehab from time to time but it has to be a super great deal for me to take one on.

Jackie

lynnhahn

"Re(1):Hi. Real estate investing strategy ques" , Tue 26 Sep 10:28

Steve, welcome to Dealmakers!

As you have already discovered, there are MANY ways to successfully invest in real estate. You have to choose what best suits your personality, financial situation and tolerance for risk. Following is a summary of our personal strategies:

We purchase homes utilizing some type of owner financing. First choice is “subject-to” the existing financing. Second choice, contract for deed. Third choice, lease-purchase. We never use our own money or credit to purchase properties. When purchasing on contract for deed or lease-purchase we negotiate the longest possible term that we can get. For instance, a contract for deed with no balloon is best, balloon in 10 years would be good, balloon in 5 years would be okay – you get the drift. On lease-purchase we always do a 12-month term with option to renew for XX terms (XX = many as we can get).

When selling our properties we sell 99% on lease-purchase with 3-5% down. We like one-year terms, but sometimes will stretch to two years depending on the buyers needs. When you sell on lease-purchase, and structure your agreements properly, you avoid the day-to-day problems of a typical landlord. For instance, our tenant-buyers are responsible for all repairs so therefore we don't fix leaky toilets.

We do not transact any real estate business in our personal names. We always use a separate entity in order to maximize tax savings and to protect our personal assets.

Hope this helps.

Happy Investing!
Lynn

Those who say it can't be done are usually interrupted by others doing it!