All Forum Posts by: John Stevenson

That is true and that is why this forum is such a good place. When you have a network of mentors and experienced advisers to double check investment decisions then your fear can be pushed to the side.

It is strange though that the American public has very little fear of maxing out their credit cards on flat screen plasma TVs and buying gas guzzling automobiles but has such fear of real estate.

ABSOLUTELY! You have to see beyond the financial troubles of today and invest for tomorrow. The adage has always been buy for a little, sell for a lot. Since housing prices are the lowest they have been in a decade, it does not take a lot of vision to see there can be a lot of money to be made here.

I have seen investors buying discounted homes out of the foreclosure and short sale market, rent them out for a period of 3 - 5 years and plan to sell them after the market recovers. They can easily see a yield of 15 - 20%! The sad thing is that these investors are coming from other countries to take advantage of our deals. As Americans, we need to step up and see the potential!

Estates that are in probate use real estate appraisals to set market value. Once an appraisal is part of the estate file, it can be a difficult matter to get them to budge.

@K. Marie Poe makes a good point. All you can do is prove that the purchase price needs to be less and make a solid offer. If they cannot find a better one within a reasonable amount of time, they will be "forced" to consider what they have.

Good luck.

Whether a person comes to the table with cash or with a loan really makes no difference in the end - there is still a closing.

One big question is will the VA loan be finalized before you need to fulfill your end of the contract? Sometimes these loans can take time to complete.

Additionally, you need to make sure that all the paperwork is complete on your end and that there are no lose ends that could unravel under VA scrutiny.

If you decide that the market cannot support wholesaling right now, I would like to offer another option. I personally would recommend investing in discounted single family residences. Here is why I think it works in this economy.

1. Distressed properties (Foreclosures, short sales, REO etc) are readily available and are being sold for cheap.

2. Because of the restrictive lending requirements, loans are hard to get forcing many people into renting. If given the choice, people like renting homes more than apartments.

3. As the economy improves and lending requirements relax a little, these renters are going to want to buy. In fact, rent to own or land contracts are become more and more attractive.

4. As demand increases and the economy improves, so will real estate prices.

My research indicates that if done properly, the yields will be between 15 - 20%. I estimate the holding period to be no longer than 5 years.

There are some good comments made in this thread. Since you already have four rental properties, you are not new to the finance game. In the time it takes to pay off your mortgage, property values and interest rates are bound to raise and the potential for super high returns on your investment maybe all but lost. If your investment strategy is calling for purchasing more rental properties, then my advice is to do that now before prices begin to increase.

Of course, make sure you project your cash flow and yield rates for both scenarios over let's say a 5 year period to make sure that you will come out ahead. But I bet the numbers will come out better with a refinance and purchase.

Jon makes a good point here. Since the fees are so low, you have to ask yourself if it is really worth all of the hassle.

Now you mention that you are an investor... hmmmm. Have you thought of flipping a property to them? You purchase an investment property and they turn around and purchase it from you on a land contract. You make the interest and they get their property.

Your enthusiasm is great! I wish you the best of success. So what is your game plan? Do you have an idea of what you want to invest in? Are you looking to wholesale, get into the rental market or flip properties?

I personally would recommend investing in discounted single family residences. Here is why I think it works in this economy:

1. Distressed properties (Foreclosures, short sales, REO etc) are readily available and are being sold for cheap.

2. Because of the restrictive lending requirements, loans are hard to get forcing many people into renting. If given the choice, people like renting homes more than apartments.

3. As the economy improves and lending requirements relax a little, these renters are going to want to buy.

4. As demand increases and the economy improves, so will real estate prices.

My research indicates that if done properly, the yields will be between 15 - 20%. I estimate the holding period to be no longer than 5 years.

Good luck. I will keep an eye on this post and see how you are doing.

Real estate investing without good credit or cash means that you need to take it slow and steady to build equity. The worst thing you can do is overextend yourself and trash your credit even further. Here is what I would recommend:

Find a house that you can either rent, rent to own or by on a land contract. Now you have to make sure that you find a good quality house with either two or three bedrooms. Why? You want to buy a house that others would want to live in and one that is not going to turn into a money pit.

If you rent or rent to own, make sure that the rental contract will allow you to sub-rent. This means that you can turn around and re-rent it out for more. Finding cheap rent helps. For example, you rent a house for $600. You then find someone to rent it for $675. Every month you make $75. Of course, if they do not pay the rent then you have to cough up the $600. So find a good tenant. Now, do not spend this money. Save it to invest again.

The other method is to buy on land contract. Because mortgage rates are so low, this is not always the cheaper option but it keeps you from going to get a bank loan. In a land contract, the owner plays the role of the bank but he will charge you a rate higher than the bank, especially if your credit is poor. You put a little money down, lets say $1,000 - $5,000, then you make monthly payments to the property owner for generally a period of 3 to 5 years. At the end of the payment period, you have to pay the remaining amount in one lump sum. That is when you get a loan. By then, you have equity and hopefully a higher credit rating. Meanwhile, you rent out the property for at least what you are paying.