Tri-Cities, WA R real Estate question

[Lisa R.]

Hello there – I have a question that has had me stumped for some time now. I hope I can get some good feedback. I live in the Tri-Cities in Washington state. And it seems overall as a whole, that Tri-Cities real estate is not very popular. I really don't ever see anybody discussing the Tri-Cities, there are no large meet ups that I can find, yet our housing prices are still fairly low and and we have a decent amount of people. You can easily get a new four bedroom two bath house out here for under 200,000. For under 500k you can basically buy a mansion, ha ha. Any thoughts? Thanks!

[Account Closed]

@Marina M. 

HI Marina, pleased to meet you.

Here is what I do, it is called *Subject To*.

Actually, it is very lucrative. These are generally Not Fixers - Most sellers in this situation either:

1) have to sell quickly or

2) don't have enough equity to cover real estate fees, closing costs and other fees or

3) don't want to or can't afford to do repairs and or don't want to have people traipsing around their house or

4) have bought another place and are carrying two mortgages or

5) lost a job or have a medical emergency, etc or

6) are in pre-foreclosure and have to do something quickly or

7) are inherited with a mortgage and can't make the payment or

8) have a job transfer and need to sell quickly

I allocate $25,000 per property. The money I give a seller comes out of the $25,000 investment.

When I sell to a Tenant Buyer, since I am offering Terms that they otherwise can't get, I sell the property "As Is" for a "built in equity" of an additional $10,000 to $25,000 depending on the house. (I bump up the sales price what the value WILL be) then I get that (it is called "the back end" when they refinance or sell. The buyers are usually successful businessmen that can't get bank financing because they aren't W2. They have good income, money in the bank and want to buy a home.

I get a "down payment" up front of $10,000 to usually $25,000 then I get the monthly cash flow and then I get a "back end" equity payoff.

When I "Buy & Hold" and only rent it out, I have to take care of a tenant, fix the roof, replace the AC etc. Worry about them trashing the house, worry about vacancies. When I eventually have to replace the roof or AC it wipes out the profit from that house. The most I get up front is one month's rent. I continually have to find new sources of money for the next one, usually a bank. Bank's Stop Lending at 10 properties.

However, when I sell it to a tenant buyer, there are no real estate agent fees, I get $25,000 immediate cash, I don't have to worry about roofs, ACs, and tenants and I get the same cash flow. When the roof or AC goes, the Tenant Buyer owns the house, so he takes care of those. If the market tanks, my built in equity still exists. Each time I get a Tenant Buyer’s down payment, that gives me Money to Buy the Next one and the Next one and the Next.

Pretty cool, eh? I'm not allowed to "self promote" so I can only stick to the facts in a post. But, if you want more info send a colleague request and PM me. Regards, Ken