The life and times of an Arizona Investor

This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..

Thursday, April 28, 2005

The "new" strategy

Ok folks, so I mentioned in a previous post that we are now taking the path of least resistance to real estate investing.

In our local paper, they mentioned that the average sales price went from 169k to 190k in 3 months! Looks like California's wave finally hit the old pueblo.. In this type of market conditions, are my systems still going to work? (You should be asking yourself this as well)

The answer is no. I'm real big on "buy and hold", my goals are to own 15 properties free and clear and take in the cash flow every month when I'm staying at my hunting cabin miles away from anybody!! If you have to offer 3 times that amount of offers that you did last year to get one accepted, is it worth it? Probably not..

Unfortunately, the market conditions are interrupting that type of strategy. Bottomline, rent market is horrible , resell market is strong.. So, its tough to buy a house and make it cash flow. I WILL NOT TAKE A PROPERTY WITH NEGATIVE CASHFLOW. That strategy right now has the highest resistance.

I think I'll post my personal opinions on what type of techniques would work in this hot real estate market..

Now, everybody knows I like preforeclosures, so here's my new strategy..

In the preforeclosure market, we are going to add a new buying program that I think will help increase the number of houses we buy. What if I say to a seller, " How about I pay off your debts, eliminate the risk of foreclosure, build your credit, STAY IN YOUR HOUSE ( keep your kids in the same schools), and keep most of YOUR EQUITY that you've worked so hard for, do you think you would be interested in me helping you??"

You betcha! I would be taking the property over with the option for the seller to buy it back via a lease option. Essentially, I would be getting the future appreciation (maybe a little of the existing equity) as profit. And as always, I'll be in control.

It's a little complicated for those who don't have a solid understanding of subto and l/o's, but it's a solid plan that can work if the seller is willing to work at it. I am not going to get into details on this strategy, but I will log the amount of interest and deals that I make from it.

Good investing!
|| Bginvestor, 11:51 AM

4 Comments:

Lurk here all the time. I'm intrigued. Sounds like a great strategy.
Blogger Nikki, at 12:53 PM  
But if the owners didn't make their payments to the bank, what makes you think they will make their payments to you?
Blogger Shaun, at 1:33 PM  
Shaun,

I've talked to a lot of people that were out of work for a short period of time and was able to get back into the work force, however, they have accumulated 5k of debt and cannot recover.

Since I will own the house (subto) and they will be the tenant buyer, they have to pay on time or else they will be evicted!

Like I said, they have to follow the rules.. If they do, they will be much better off than being foreclosed!
Blogger Bginvestor, at 8:44 AM  
Sounds both like a good deal and risky at the same time. I'm sure most people will be honest and try to pay, however, the bad apples may ruin it all (i.e., make you drag out an eviction order, trash the place). Proceed with caution, and CYA with your agreements.
Blogger Steve, at 8:56 AM  

Post a Comment

$2.95 a month web hosting