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How to Succeed in Real Estate Without Really Trying
By: William Tingle
Admittedly, the title of this article is a bit of hyperbole: you will have to make attempts - in other words,
- to make it in real estate. Making it in real estate doesn’t mean you can sit at home and collect a rent check - at least not until you’ve done your work and put the time and effort in.
But there is good news: success like that in real estate is not only possible, but it happens all the time. Successful real estate transactions still occur frequently in the United States, even if it seems like a slow house market has brought things down to a crawl. What you’ll have to remember is that a big fall in the overall market never means that
individual prospects have to be hurt. It simply requires a change in strategy.
You want to hear about a change in strategy? Five years ago I was living in the US and buying 2 to 4 houses a month. I lived in a 250k house and had a pretty good lifestyle. I traveled 3 months out of the year and enjoyed life. A divorce and a couple of blood sucking lawyers later I live in Central America in a cheaper but much nicer home and travel to the US a few times a year to pick up properties at prices I never dreamed possible before. I live on less but have much more.
If you want to make it in real estate without really trying, you’ll have to put in a little bit of upfront research and yes, hard work. But as you get better at recognizing the good prospects and learn some great maneuvers for making real estate transactions, you’ll begin to feel as though you possess some sort of “cheat code” for making money in this business.
As someone who has gone from having great credit and tons of advantages in real estate investing to having no credit and few advantages, I can tell you for a fact that changes in your situation do not have to limit your deals or opportunities.
I bought hundreds of houses when I had great credit, most of them sub2 which required none of my credit anyway. Now that my credit is shot (a divorce will do that) I am still able to buy like nothing ever happened. In fact my latest purchase was a 2 unit in New Orleans just last week.
Without any further ado, here are a couple of ways you’ll be able to succeed in real estate just like I do without major, overarching efforts:
Subject To Transactions
a Subject To transaction is a great way to make a real estate purchase or acquisition without investing a lot (or any) upfront money. In a Subject To transaction, you’ll be able to find someone who wants to get out of their mortgage payments and help them out by taking over the payments yourself - while investing a small amount of money for making up back payments or fix-up. This amount is usually less than $2,000 for us. No loan bankers, no real estate agents required - unless of course you need to check the laws in your area governing these types of transactions.
Once you’ve completed a Subject To transaction, you essentially have a new piece of property with very little commitment except the loan payments that had to be made anyway. These can be a little more difficult to find these days with significant equity but they are out there.
Making a real estate purchase can be a major pain in the you-know-what if all you do is use your own money. No one wants to get involved in a money pit. But if you can partner up with other investors or use private money from a passive investor, you’ll be able to make transactions that you couldn’t have otherwise made, leveraging yourself further and taking a lot of the burden off of your shoulders.
My first New Orleans purchase (completed just last week) was made with private money. Don't confuse this with hard money where you pay astronomical fees and points, my private investors lend to me at 5-7% with no points at all. Tired of getting 1% in CDs and savings accounts, these guys are loving the rates of return I can give them and it is all secured by real estate bought at today's rock bottom prices.
My new double shot gun (how folks in New Orleans refer to a duplex) set me back a whopping 10k. Another 15k in fixup and I will have 25k in it all totaled. Now the best part. This property will rent for
$750 a side!
My payment on this property with taxes and insurance is less than $300 a month. This leaves me over 1k a month cash flow on
I gotta tell you, managing just a few properties like this is a heck of a lot easier than managing dozens of them like I did before.......and the best part is.......
I make more money
I may not be “lazy,” but sometimes I definitely feel like it.
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