How much can I afford to pay

[Bryan Barrett]

I am trying to answer the queston:

“How much can I afford to pay?”

Can you help me?

I have 2 houses and a rural property.

House 1 – Rental. I owe $70k on it Zillow says its worth $185K

House 2 – Primary residence. I own this house free and clear. Zillow says its worth $290K

Rural Property MS – I own 30 acres Vacant with improvements (cabin and pavilions). Worth $150K

I have no money in savings now but could probably scrape up about $5K

How much can I afford to pay?

[Account Closed]

Looks like you are in a good position to control more real estate  if you get creative ----

You have $555,000 in potential equity ----- short on cash - but with that equity you should be able to leverage yourself into lots of real estate.

Here are some ideas for you:

1. create a blanked mortgage on some of your equity - pull out $200,000.00
2. create notes on some of your equity - simple to do - have a title company created a note, give yourself some good terms, like 3% interest, interest only with a balloon in 7 years. Offer the note for as a down payment on the real estate you desire to own.
3. same as #3, but ask the seller to take back some paper also (if not all of it) this is called "papering out"
4. create a note again on one of your equities - sell the note for a cash discount
5. make an offer on the property you want subject to a 1031 exchange or subject to an outright sale of another property
6. offer one of your properties for sale with a deep discount (you'll have lots of interest) with an option to buy back in a few years (you get cash and have an option to buy your property back - buyer has your property and cash flow for a period of time plus a great yield on his investment)
7. borrow on your home - use the proceed for cash flow real estate
8. don't buy - C O N T R O L  the property you want with a skinny contract of sale - with the right to market and possession if it is vacant (do a little work and improvements) offer it for sale at price that will give you a nice profit  - assign your contract for a profit. As an auctioneer, we do those deals all the time ----- there is nothing better in real estate (my opinion) than selling an asset you don't own for a profit. I call it Control and Roll. 
9. sell one of your properties to raise cash
10. put together a friendly joint venture - each member contributes some cash - 10 members at $5,000 should give you some buying power. Hold for awhile and split the profits or have a public auction almost immediately after you control it.

These are just a few ideas that should stimulate your creative juices.  

Great book REAL ESTATE EXCHANGE ACQUISITION TECHNIQUES, by William T. Tappan, Jr. out of print - lots of great techniques for doing creative deals.