If you are looking for bigger pockets RIGHT NOW, your concentration should be focused on wholesaling real estate deals to buyers who are looking to occupy the property, and helping them secure the financing needed to make to deal happen.
If you haven’t become best friends with a mortgage broker then your business may be suffering. In my opinion, Mortgage Brokers play the single most important position on the field of real estate investing. I am pretty sure most of you investors have very reliable brokers in place to handle your acquisition needs; but what about the needs of your owner occupant buyers. Become the one-stop shop for buyers and allow your earnings to run on cruise control.
The ideal scenario is to acquire a property via contract for 50 to 60 cents on the dollar and AS-IS, of course. Have your mortgage broker procure a 100% loan for your buyer at 80% of market value and look to generate a hefty cash now assignment fee. Lucky for us, FHA goes up to $700K. So a house with a market value of $580K based on the properties sold in the last 3 to 6 months should be purchased at or around $460K. That leaves $120K in play. In order to ensure that the property is then purchased NO MONEY DOWN, you allow for the closing costs to be absorbed by the available equity which makes you a hero to the buyers. So the $120K turns into about $90K.
The next step is to write an invoice to the title company as a third party company for that $90K worth of services performed. As I mentioned in the beginning, it is very likely that this project is a rehab of some sort so funds must be set aside for that purpose. Another ring around the wholesale assignment is getting the buyers’ desired work and necessary updates done for them, without their involvement, by using the price they paid as a “construction loan.” So, not only can you demand 3% or more of the purchase price, putting you at almost $14K, but you can also quick turn the rehab work for profit with your 1099ed contractor team. The funds left unused go to your company and all of this happens within 10 business days.
If you can use an extra $20K or so….you may want to try this technique. Build your owner occupied buyers list and start dropping checks off at the bank.
Blessings to Your Real Estate Investing Successes,
Milton B. Yates
Related posts:
- Awesome Networking Article on Bigger Pockets! Thanks National Networker!
- Bigger Loans, Bigger Buyers!
- Using a Homes For Sale By Owner (FSBO) Company
- Finding the Owner of a Property
- Every Short Sale Opportunity isn’t Worth Chasing – More Time – Bigger Checks
Article Author: Milton B. YatesMilton B. has written 11 articles for us.
Visit Milton B.'s Website: http://www.miltonyates.com
Joshua Dorkin
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can you explain in detail the scenario with taking out the money from doing the loan
Thats really great thanks for the information.
Really interesting point, I should probably look more into this. I am going to look around the forum. Thanks.
Fine article to read which elivates the text in good way and potraits in right form . The retail pearl business in the US has not changed much, and jewelry and department stores are not the place to get discount pearls.
I am an experienced investor who usually graps these concepts with no problem. However, I have no clue as to how this should work. I have a buyer right now that I could possibly do this with, but you lost me somewhere along the way.
Again, could you explain this in a little more detail so I can fully grasp how to do this?? Thanks.
After reading Rich Dad and Poor Dad I’ve been trying to get in to real estate investing but my biggest issue has been purchasing something with value. Lately all I’ve been able to find is properties with inflated values.. to me a house is just a house and not worth $750,000 especially if it is some it’s some dump in california that you could buy 12 homes in Ohio instead.
Ahhhh sooon I will learn. Great Article.
-Jason
This strategy really works and the best way to find these “Owner Occupants” is just to advertise for them. It’s pretty simple. For more free real estate tips and secrets, visit my site.
Bryan Ellis’s last blog post: Homes Are Selling More Briskly… And It’s “Bad” News
Milton,
Very Nice!!!!!
Anthony
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