PART 3:
This is Part Three of the Article series Why Does Richard Roop Consider the “Free and Clear Money Machine” to be the “Ultimate Strategy”?
In this multi-Part Articles we will go into detail on how this powerful, yet simple and easy to do Investment Strategy works in the Real World.
For more Free training and free articles and videos on this subject click here
http://www.free-and-clear-cash-machine.com/
3) Turn a Profit of 15% on Every House You Buy
When you show a seller what they might net selling their house traditionally, you can easily get them to take 10% to 15% off the present value and still call that full retail price. You can then get them to go even lower by asking if it’s OK if you made a margin on the deal. Then lower if you took the property as is. And even lower if you gave them some or all of their equity in cash now instead of later.
Once you can reliably predict what you can sell the house for offering owner financing or a lease option to your buyer, you can then determine the maximum price you can pay the seller. I suggest your price to the seller ensures you get at least a 15% net profit after your transactions cost of buying, holding and selling. If that drives the price down too low for the seller to accept, you now can push the price back up by stringing their money out into the future.
4) Owner Financing Sales and Lease Options will Allow You To Sell Quickly
Since the mortgage market meltdown, sellers are having trouble selling BUT buyers are having trouble buying also. Many of the loans for less than A-paper buyers are gone. This has created a growing demand for rentals and the need for creative seller financing. The ultimate strategy has the answers.
When you’ve created 0% financing on a house you bought, how quickly do you want to pay it off? Never! Then how can you sell? You sell to a tenant buyer and insist they close with wraparound owner financing. Or you find a buyer with more money down and close NOW with wraparound owner financing. On a “wrap” you make a mortgage payment to your seller while collecting a mortgage payment from a buyer. You keep the difference. Let me illustrate:
Example #1:
Giving the seller Cash Flow — Getting Cash Now and Cash Later
Same scenario but now you buy with no money down and pay the seller $1,000 principle only payments each month instead. In this case you keep the $20,000 from your buyer. That’s cash now to you. Then in 5 years you owe the seller $160,000 but your buyer owes $200,000 for a $40,000 backend.
Example #2:
Giving a seller Cash Now — Getting all the Cash Flow
The house is worth $220,000, it’s in good shape and owned free and clear. Your market is slow so you figure within 60 days you can only find a buyer who’ll pay $220,000 if you finance $200,000 at 6% with $1,000 a month interest only payments. It would be easy to show the seller that $200,000 is fair when taking into account only 10% for normal transactions costs but the seller insists on full price or $220,000 with $20,000 down. Could you pay that? Yes you can. The only question is when.
What if you paid the seller $20,000 now and $200,000 as a lump sum balloon payment due in 5 years? They get their price PLUS some cash now. What do you get? You get $1,000 a month for 60 months or $60,000 with no landlording! At the end of 5 years you still owe $200,000 to the seller and your buyer still owes you $200,000. This is a free and clear money machine!
For more information and free articles and videos on Richard Roop and his Free and Clear Cash Machine please click here http://www.free-and-clear-cash-machine.com/
July 16th, 2009 at 4:54 pm
this is really works!