Investment Goal Setting

[Roselynn Lewis]

I am new to real estate investing. I have started the process of educating myself and it seems one key is having concrete goals. E.g. Say my initial goal is to generate $ 5,000 - $10,000 per month in free cash flow through renting properties within a year. I am interested in purchasing small properties worth 30k -50k and below and renting them out and in the market for about 650k per month. How do I go about reaching this goal? Is this reasonable for one year? Where do I get started? Any thoughts?

[Seth Williams]

Roselynn,

If you're willing to do some negotiation and invest some significant time into the process, you could potentially generate this kind of monthly income relatively soon if you pursue sellers who are willing to finance the sale of their property (accept payment for their property over the course of several months or years). Buying properties will seller financing usually takes a little bit of "selling" (as a lot of sellers won't even consider this kind of transaction until you're able to help them see the benefit of doing so... then a lot of them are willing to play ball), but you'd be surprised at how many sellers will ultimately go along with this.

I know a few investors who buy ALL of their properties will seller financing (they literally won't do business any other way). The benefit here is that when a seller finances the sale, you can negotiate a loan with 0% interest, or no money down (or if the seller is motivated, maybe both). It's all about determining what is most important to the seller... Do they need to get their full asking price? Do they need to get a large down payment? Do they want to make interest income?

You can usually give them what they want IF they're willing to be flexible in other areas. For example, you could pay their full asking price IF they're willing to finance the sale with 0% interest and no money down. Or, you can give them a large down payment IF they're willing to sell for 50% of market value. You can pay them cash IF they're willing to sell for 25% of market value (this is my favorite approach).

You can give most sellers what they want IF you can help them see the benefit in doing so, and why it's in their best interest to give you what YOU need in other areas.