Making Money With Real Estate
Optioning Hilltops
Making money with real estate isn't unusual, of course, but
there are less common ways to do it. There was a man, for example,
that went around optioning hilltops. If the owner wanted $30,000
for the land, this investor might offer $300 for an option to
buy the property at full price ($30,000) within six months. He
didn't have to buy, but the sellers liked the idea of getting
full price, or just keeping the $300.
Next, he contacted every radio station, police department,
and cell phone company in the area that might need a hill to
put a radio tower on. It is common practice to lease the properties
on ten-year or longer leases, for tax reasons. Once the investor
got a lease signed, it was relatively simple to get a bank to
lend the money for the purchase. So he might have payments of
$200 per month, and the radio station puts up the tower, and
rents the hilltop for $350 per month. Total risk? If he doesn't
find an interested party, he walks away, losing the $300 option
fee.
Making Money With Fixer-Upper Real Estate
It isn't unusual to buy a house, fix it up and sell it for
a profit. It is less common to find these opportunities in the
$10,000 price range though. We found that there are towns in
this country where you can still buy houses as cheap as $6,000!
We bought a house in a beautiful little town in Montana for $17,500,
paid a plumber and a friend to fix a couple things ($2,000),
and after living in the house for a few months, sold it for $28,000.
For more of the story you can visit our website on Cheap
Homes .
Making Money With Land
Several times I have bought property and then sold it on a
"land contract." Also called a "contract for sale,"
and various other names around the country, this simply means
taking payments from a buyer, and delivering the title when the
property is paid for in full. This is a great way to make money
with real estate if you already have some money to invest.
Here is how my first deal went: 3 acres for sale for $4,100.
I offered $3,300 cash, and we agreed to $3,500. This was back
when closing costs were lower, so I had maybe $3,660 into it
after closing. I spent a few hours raking it, and removing dead
branches, etc. Then I put a hand-painted sign on it, offering
it for sale for $4750, with only $250 down payment and $100 per
month payment, with 11% annual interest.
Within two weeks, I sold it for exactly that price and terms,
and closed the deal in a restaurant, with virtually no closing
costs. In the end, I sold the land for $1150 more than I paid,
but I also collected hundreds per year in interest. The rate
of return on a deal like this is somewhere over 20% - certainly
better than a bank account, and of course it should be done on
a larger scale than this (the next time I did it was on a mobile
home on land).
The reason this works is that you are making it convenient
for the buyers who don't have the cash to buy the land. At the
time, that 3 acres was worth about $4,000, yet the buyer paid
18% more than that for the convenience, and paid 11% interest.
With a couple hundred dollars in the bank, his options were limited.
I made it possible for him to own that land, and it's worth about
$20,000 now.
Other Ways of Making Money With Real Estate
There are many unusual ways that people have used to make
money with real estate. I know a guy who made almost as much
money letting a construction company carve gravel out of his
property as the property cost in the first place. It didn't even
reduce the value of the land. A friend of mine bought a small
piece of property and let a company cut half the trees out for
$4,500. When they were done, you couldn't even tell they had
thinned the trees out, and the land had the same value.
I'll add more unusual ways of making money in real estate
in the future, so check back.
How to Buy Real Estate That's
not for Sale - This page looks at the opportunity in buying
before a property is listed for sale.
Free Fixer
Upper Real Estate Course! Get your free Fix and Flip Course
at www.TipsForFlippingAHouse.com.
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