Newbie Help Needed: Best Way to do All Cash Investments

[Nadia P.]

Hi all!

I'm a newbie to real estate investing and needed some advice on investment strategies given a constraint I have. Due to religious reasons I cannot take or pay interest in any form; therefore all real estate investing I do needs to be on an all cash basis. For the past two years, I've been investing with a company that flips properties in the SF area then gives me a return upon sale of the property.

I have a decent savings to work with, however nothing even close to what you need to buy a house in SF. What is the best way to invest in real estate given that I have to do everything on an all cash basis?

Thanks in advance! Nadia

[Ted Schmidt]

Nadia,

If you buy homes in the lower range of CA prices ($150,000 - 250,000) and you offer your tenants a rent-to-own contract, then you would only be collecting rent which may not conflict with religious rules against interest.

If you offer the prospective tenant an option to buy the house within a fixed time period (usually 2 - 7 years), then the tenant will have more incentive to take good care of the house. In this scenario, the renter pays extra every month that goes towards the purchase price.

You can earn around 13% or more return on investment and also provide a path to home ownership for a deserving family who also does not agree with paying interest.

I hope this information was useful and please let me know if I can assist you further.

-Ted Schmidt