Larry Goins Course Strategy

[Charles Stewart II]

Hello,

I am asking for opinions on the strategy used in one of Larry Goins courses.  This is a brief of how it was explained on Ron LaGrand's website: 

"If you buy the property for $5,000 and sell it for $30,000, you can ask for a $1,000 down payment and finance the remaining $29,000. If you finance that amount for ten years, at 11% interest, the payment will be $399.48 per month. Most people will be able to afford a $400 mortgage and they should be able to find a $1,000 down payment as well."

The idea is that you are getting the house a such a low cost because it may be a distressed property with minor repair needs.  You would pay off what you have "in the house", which is $5,000, within 12.5 months.   At that point, the $400 paid to you would be all profit.  You wouldn't have rent repairs because the person is buying the home, not renting.

Does this appear to be a good investment strategy? I feel it is, but I would like to hear from community members here on Bigger Pockets.

Thanks in advance!

[Larry Goins]

@Charles Stewart II Hey, this is Larry. Our students and I are still doing lots of seller financing. We typically use a lease option if the property is "fit and safe" as would be required of a landlord. If not we use a land contract and follow Dodd Frank rules. It hasn't slowed us down. 

Also, the article you spoke of quoting 11% is an older article. We now use 9% to make sure we are compliant. 

Remember, $5000 is just an example. I recently purchased a single wide in a park for $1,500 and have done these deals as high as $50,000. We do a lot in the $20,000 - $25,000 range and we stay out of war zones and make sure the house is livable or close to livable. It is true that the lower priced ones will be more likely to default but once you learn how to minimize it you can get great returns and cash flow starting with little money. 

Do more research before deciding and let me know if I can help.