3 Ways to Wealth in Real Estate - CashFlow Flip Hold – Here’s How

[Account Closed]

I’m always looking for the right solution to that old question “How Do I make money in real estate.” I will focus on How To Buy Properties because I believe you make money when you buy. What you do with the property afterward is flexible if you buy correctly.

I buy "off market" properties before they hit the MLS. Nothing special about that, but I buy the properties by simply taking over the mortgage. That's HUGE!

Using this technique I bought a 4 Bed 2 Bath in Mesa Arizona

The numbers look like this:

Buying
ARV	$225,000
Principal	$223,969
Equity	$1,031
Monthly Payment	$1,217
Cash to Seller	$100
Cleaning	$500
Cost In	$600
Selling
Lease/Option
Tenant Buyer Fee to Me	$25,000
Tenant Buyer Monthly	$1,950
My Cash Flow Monthly	$733
Cash To Me
Tenant Buyer Fee to Me	$25,000
3 Year's Cash Flow	$26,388
3 Year's Principal Paydown	$11,474
3 Year's Tax Write Off's	$$$
$$$ To Me on A Slim Deal so far	$62,862
ROI - Too Big To Compute	________

I did this one in Mesa AZ. The underlying mortgage was $223,000 with a market value of $225,000 and a payment of $1217. The seller had taken out a new loan a year earlier, then got married and didn’t want the house. So, basically no equity.

I gave the seller $100 and took over the loan “Subject To”. I paid my contractor $500 to clean up the property, I then sold it to a Tenant Buyer who gave me a $25,000 option fee and pays me $1950 a month. I chose to cash flow the property.

So far, I've gotten $25,000 cash for the option fee, plus about $700 a month for about $8,400 a year for 3 years (so far) so $25,2000 and he's paid down my principal about $12,000 plus I get depreciation plus he takes care of all repairs and maintenance.

So, on $600 invested I've gotten well over $62,800 (so far) on a "slim" deal that had no equity. I don't know what CoC or ROI that is, but it's pretty good.

Now, I could have walked away like everyone else, but I'm not that kind of guy. I could have flipped it but there wasn’t enough equity for that to work, I could have simply rented it out, but then I wouldn’t have gotten the $25,000 option fee, and I could have lived in it. I had a lot of options.

The key was in How I Bought the Property. I didn’t have to worry about bank financing.

Can you do these with no money down? NO, you can’t. You still have to have reserves enough to make the mortgage payment even if the house is vacant. You have the responsibility to keep the seller’s credit report spotless.

But are there ways to make money that other people don't see? Certainly! and I love seeing the expressions on the faces of people from California when I show them the numbers, it's priceless.

[Mike Anderson]

Jaron - I never understand why people are sorry for the buyer?   I mean they read the deal and at the time they felt it was in there best interest or they should have not done the deal.   
Everyday, people buy cars that are not the right deal but they feel they want it.  They do not teach financial IQ in school and it will always be that way.