Want To Invest In Real Estate With Limited $$$ ?

If I wanted to invest in Real Estate today and had little or no money, one place I would look at would be single family houses in NICE neighborhoods. I would find houses that would fall into any of the following categories:
Houses that are vacant, probably with a “For Sale” sign in the yard.
Houses wherein the owners are having trouble making their loan payments.
Houses listed “For Sale By Owner” in the newspaper. Don’t forget to look in “The Shoppers”, “Thrifty Nickle”, etc.
Houses that have signs or are listed in the paper “For Rent”.
I might even run a little ad myself reading “House Wanted For Rent”. How do I contact these owners? If they are still living in the house I would arrange a meeting, preferably in the home where I could sit down with the owners and negotiate a deal.

In my discussion with the owners I would try to find out what the REAL situation is.
For Example:
Why do they want to sell or rent?
How much is owed on the property?
How much are the monthly payments?
Are the monthly payments current?
How much does average utilities cost monthly?
Are there any other expenses such as Homeowners Association fees, etc.?

Based on how I felt after gleaning this information, I would make the owners an offer to lease their house with lease payments equal to the current monthly payment. This offer would grant me the right to sublease the property. I would also require a 2 year option to buy the property for an amount equal to what they owe on the property now. The “Option Agreement” would contain a clause stating that I could renew the option for an additional 2 years with a payment of $500.00 at the time the option was renewed. Then, additionally, I would make the contract contingent upon me finding a tenant to sublease the property within 60 days.

I would then advertise "Lease With Option To Buy" (in such and such neighborhood) "Credit No Problem" in the local newspapers and in any freebies I could. I am confident I would receive many responses to my ad. (If I don’t, no big deal, my 60 days expire and all I have lost is my time – which is valuable).

There are many people with some cash who want a home to own; however, they have bruised credit or some other reason why they can’t qualify for a loan to buy a home. I would require an option fee of $2,000.00 (or more, depending on the ability of my party) and also a rent amount of at least $100.00 above the amount I am paying. The sale price would be at least $5,000.00 above the current mortgage balance ($5,000.00 more than my option price is.) Then I would give a credit of $100.00 per month for each month that the rent is paid on time. My experience has been that lease options really are motivated by applying a credit from part of the rent towards the purchase price.

I am confident that in today’s market, I could repeat this process over & over – (I have done it when the market was not as bad as it is now). In San Antonio we have over 1,500 properties posted for Foreclosure in January 2010; the MOST in 20 years.

THE DEALS ARE OUT THERE! As an old highly respected investor, entrepreneur, and builder Bill Zeckendorf said, “You make money when the blood is running in the streets.” Well friends, it’s running in the streets now.

By the way, if you are an investor or want to be, I recommend the book “Zeckendorf” – You may find it on Amazon. This man, William Zeckendorf, was the innovator of many things we have today – Shopping Malls, Condominiums, etc.

OK, back to our homeowners who we wish to contact. How do we find them? You can do this online; go to your County Tax Appraisal website. By entering the address, you should be able to find the owner of that property.

Finally, I know I ramble a lot, but if you have any questions about any of our information, please contact us – NO CHARGE!

These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.