When investing in Free and Clear Real Estate (or Real Estate with high Equity) it are important steps you need to take to make sure you achieve the success you are looking for.
Follow these steps to make great offers on free and clear homes:
1. Find out what price point you expect to get by quickly offering flexible owner financing to a buyer
2. Get a feel for the realistic minimum for monthly cash flow you can get each month from the property.
3. Identify the minimum you want earn (Profit) from this transaction
4. Estimate your costs for marketing, buying, funding and selling
5. Add up your projected costs for repairs and holding until occupied
6. Determine if you are going to get out some extra Cash at time of closing
7. Determine how much money you need to raise to finance the deal
8. Determine the cost per month of raising these funds on a private investor 1st mortgage
9. Calculate the net positive cash flow (that is do not include the cost of offering monthly payments to the seller on a second mortgage)
Your maximum allowable offer (MAO) on a free and clear deal equals:
* Your resale price, minus your estimated profits, minus all your cost to buy, hold and sell, then
* For the Length (in months) of your seller carry back loan – add the total positive cash flow then
* For the term of your seller carry back note – add the total principal reduction
If you do not offer more than this final number, then you’ll meet your target profit goal.
The beauty of this investing approach is that you structure 0% seller financing with the homeowner. And there so many different reasons why sellers are accepting offers with no interest on their equity.
Many investors don’t think sellers will accept zero percent financing, or wait 5 to 15 years for their money… but they actually do… and they do it all the time. But you have to ask, because they won’t volunteer.
The Seller financing benefits for you as the investor are awesome.
* You can be on the receiving end of all the positive cash flow on the property when the seller accepts no payments. If you net One Thousand Dollars a month for let’s say 7 years = 84 months. What do you think? Would that be exciting and worth getting involved?
* You can make any property cash flow by only offering the seller payments based on what the houses can afford. Any monthly payments you do make are principal only and will rapidly pay off the house… creating a huge backend. If you could buy a house with no money down, get at least a breakeven cash flow, and then collect $50,000 or $100,000 within 3 to 10 years, would that be a deal?
* And if you like, you can pull most of your profit out in advance… in cash… on the day you buy it. There’s no rush to quick-turn these properties when you have no money tied up in the deal and you’ve collected an extra $10,000 or $30,000 in cash on the day you bought it.
It may seem complicated and difficult, but it is not at all. The marketing for Sellers is fast and easy. Filtering these leads and selecting the ones you want to work with is simple (Hint: if there’s a lot of equity… meet the seller in person!). the Negotiating and deal structuring is as systematic as 1,2,3. Therefore the deals you get using this Systematic Approach are easy to resale quickly or just occupy or rent forever.
Use the steps outlined above to make multiple offers and then calculate and recalculate different offers based on:
1. Having the seller be cashed out at the end with no payments until then. (they wait for ALL their equity) 2. Sharing or passing on of the net cash flow each month to/with the seller, 3. Giving the seller some cash as a down payment now and 4. Some combination of cash down payment now, monthly cash flow and cash later to the seller
Sound too good to be true? You’ll never try unless you believe that you can do it. Click the link below to be taught my the inventor of this system himself, Richard Roop. Learn how many people have done deals like this and cashed in massive amounts and how you can also do this.
Here’s some Real life Proof to get you excited…
* How Mark from Virginia netted an extra $10,000 in cash at closing buying a $165,000 house with no money down, creating 0% financing with the seller for 7 years at $400 a month.
* How Mike from Washington collected an extra $25,000 in cash at closing when he bought a $120,000 house no money down, creating 0% seller financing at $500 a month for 8 1/2 years.
* How Denise and Mark from California bought a newly remodeled $400,000 house which can rent at $1,800 for just $290,000 with no money down, creating 0% financing with the seller at $800 a month for 10 years.