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Real Estate Investing -  Nothing Down Written by Robert Allen

(out of Robert Allen’s book - Nothing Down)

THE SELLER

Among the nine major sources of down payment funds for property acquisition, the seller is no doubt the most important. If the buyer has done his selection job well he will be dealing with a person who is anxious to sell and therefore flexible with financing arrangements. The seller will need to take on a role that might be new for him - that of lender. But if the buyer is sensitive to the needs of the seller, he will foster trust and see to it that both parties win. (Lending can, after all be a lucrative business with its own slate of benefits, even for property sellers.)

This section reviews eight nothing down techniques involving seller financing.

Technique No. I The Ultimate Paper Out

An investor in Milwaukee was able to acquire a $48,000 triplex from a banker who not only arranged for a new low-interest first mortgage, but also carried back virtually all the remaining equity in the form of second at below-market rates. Another investor in West Palm Beach, Florida, picked up a single family home for$66,500 by putting on a new first and having the anxious seller carry back all the rest of his equity ($36,500) for five years, no payments, no interest. Both of these investors were using the technique known as - “The Ultimate Paper Out”. Here is how it works.

When we are talking about buying or selling a piece of real estate, we are really talking about the problem of defining and dealing with the seller’s equity. Equity as a concept is straightforward enough. Everyone knows that it represents that portion of the value of a property that is not encumbered, that belongs lock, stock, and barrel to the owner. But equity is a fluid concept. It can be specified only in relation to that mysterious and shifting quantity called the “fair market value.” The owner has dreams about an equity of such and such - usually an optimistically high number. But the truth of the matter is that market forces determine his equity by determining how much his property is really worth at any moment in time. The members of the market club - you and I - gang up on the poor old seller and say collectively, “You have a nice little place, but we’ve taken a vote around town, and the best we could come up with is a price of such and such.” At that moment in time, the seller’s equity is defined, and the problem becomes how to transfer to him value equal to the equity involved.

The majority of sellers, of course, will want to hold out for a selling price at the high end of the scale. They want their equity to be overweight. No one can blame them for that but among the army of sellers in the marketplace at any given time, there are always a few - perhaps five percent or less - who say to themselves, “We like our equity and want to preserve it and derive benefit from it, but we are very anxious to sell. So anxious in fact, that we might give up some of that equity in order to get rid of the property quickly.” Alternately, these don’t-want sellers might be thinking - I don’t really feel like discounting my equity for a quick sale, but I would be willing to wait until later for a part or all of my equity to be converted to cash.”

And that is the issue when it comes to “papering out” a deal. After the seller and the buyer have determined what equity is involved, the next step is to decide how soon the equity is to be converted. It all boils down to a matter of patience. The seller with infinite patience (and infinite desperation) will say, “Here’s my equity, take it all and just get me out of this place.” In a case like that the selling price is equal to the liens. But such cases are rare.

The next best situation is the case in which the seller says, “Here’s my equity, pay me for it when you can. Let’s work out the schedule.” That is the technique referred to as - The Ultimate Paper Out”. All of the seller’s equity is converted to paper before it is converted to cash. When the buyer takes over the property, he gives the seller paper for his equity and obligates himself to redeem the paper according to mutually agreeable terms.

Not all sellers will agree to an “Ultimate Paper Out” But creative buyers should always ask. You never know exactly what the seller is thinking or how anxious he really is to sell. Perhaps only one seller in twenty will be willing to enter into a nothing down deal and of these, perhaps only one in ten will agree to an “Ultimate Paper Out” That means that Technique No. I will show up in only one out of every 200 creative deals. But it does happen from time to time - much to the surprise and delight of the creative buyer.

1. cashflow Cindy

Real Estate Investing – Mobile Home Move a Success

I found a motivated seller on a mobile home four weeks ago.   The mobile home is located in a Trailer Park in the country.  This particular mobile home park is extremely well managed by a professional management company.  Another property management company told me this park is so clean as people can eat off the grounds!  A clean well maintained park.

With a clean well managed mobile home park behind it is strict guidelines and rules to be followed either living in the park or moving homes into and out of the park.  These rules and regulations keep the park well maintained.

I sold the mobile home to a home owner who wanted the mobile home moved because she has a dog.   This park does not allow dogs.   The home owner did not want to part with her animal since she rescues dogs.

In order for us to move the mobile home the homeowner was required to pay the park owners $650.00.  This money was used to have the park owner bring in their crew to move the mobile home off the site onto the city road.  The park owners required us to use their crew to move the mobile home because they did not want any damages incurred.  

This morning they moved the home out to the road.   When they moved the mobile home they ran on the neighbor’s lawn across the street and put two ruts on the corner.   This $650.00 is for the park owner to use to repair the neighbor’s lawn and pay his crew.

The moving truck hooked up the trailer home once it was on the city street.   The parks crew guided the truck out of the park so no damage was incurred as running on neighbor’s lawn or damaging any signs.

This is a huge process moving a mobile home out of a park.   The park owners charge park owners charged $650.00 since this is the cost they incur moving a home out of the park.

We also put up an additional $1,500.00 security deposit to cover any damages that may incur removing the shed and two decks off the site.  This deposit also covers garbage removal if any insulation, stones and blocks or paper is left behind.   The site needs to be complety free of debris!

When I arrived at the site this morning my team and the parks team both worked side by side on their goal to remove the mobile home park off the site without incurring any damages.

 To my surprise they were laughing together!  Verses last Friday, everybody was shouting with vulgar words flying around the site.  Today, they all became business associates and shook hands.   It was fabulous to talk to each other and understand their point of view.

Marshal Sylver taught me how to handle conflicts and obstacles.   I’ve been trained going into any real estate investment knowing ahead of time I have challenges facing me.   The key is learning how to overcome each challenge and keep moving forward.

Now, I want you to grab a cup of Hot Green Tea and be trained by Marshal Sylver by watching his video.   You will be glad you did.

http://prosperityalliance.com/cindyconradt

 cashflow Cindy

Real Estate Investing – Raising Section 8 Rents

I started in Real Estate Investing about three years ago.  The first duplex my partner and I purchased together was a foreclosed property in Green Bay, WI. 

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It was in the middle of December.  Yes, it was cold here in Wisconsin.

The place needed quit a bit of work, however, the major work was in the kitchen ceiling.  The owner people thought duck tape would hold a ceiling together.  Well, he was wrong…….

 Through many counter offers we did get the offer accepted.

We did a home inspection and found out the upstairs unit had a fire.  The fire department had punched a hole in the roof in order to come in with their water hoses.   We went back and did get a lower price due to the fire that had occurred earlier.

After months, we finally had the place rent ready.  A Section 8 tenant approached me on renting the upstairs.  At this time: I know little about Section 8; who they were or there rules and regulations.

We filled out the paper work and the upstairs unit did pass the Section 8 inspection after a few minor repairs were needed.  The tenant moved into the property. 

Before long the one year lease was coming up; and Section 8 came back out to inspect the unit.  Again, a few minor repairs was needed in order to get the unit to pass again.  However, this time I requested a rent increase since the rents were low.

I found out; in order to get a rent increase to pass; the request needs to be submitted two months before the lease expires.

This year, I was prepared; the new lease with the rent increase was submitted two months prior to the lease expiration date.

A great product to purchase is John Dessauer’s Property Management course.  Without excellent property management skills you will have a difficult time building wealth with your rental units.

 Find Your Life’s Freedom’s! Take Action Now!!

Keep reading my blog on real estate investing this is free real estate education from a professional real estate investor.   Post any questions or comments.

Cashflow  Cindy

Real Estate Investing – I Can!

Success happens in your mind before anything happens to you in your life.  What do you want to accomplish with your real estate investing?  Are you looking for wealth building or immediate cash?

You need to understand exactly what you want out of real estate investing.

For those of you who read my blog on real estate investing; real estate education is critical.  However, even more important is your success in your mind.

I listen to Bob Proctor’s sixminutestosuccess video five days a week.  Bob inspires me each morning with his affirmations and teachings. 

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 Today’s lesson is on I CAN!  Remember; for those of you who are going to be the most successful it is moving out of your comfort zone and into foggy territory.  However, with proper real estate education, the fog is removed because you learned the how to in your real estate educational classes, books, reading this blog.  I write about my everyday experiences with real estate.  NO fluff; actual true daily experiences.  Sure I have challenges along the way; who doesn’t?

I want each of you to write this affirmation down and carry it with you throughout your day today.  Read it out loud to yourself many times today. 

Go get what you want.   Go find your Real Estate Deal and make a quick $10K on a wholesale flip.  Yes, go flip your first house!!

 Why, because YOU CAN!

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Write the following Affirmation down and say it outloud 10 times today!

I can because I think I can.   I am programmed for success. 
I believe I am a winner.  I can do anything.  My belief system is limitless.

I can! I can! I can!

 cashflow Cindy