Now I don't claim to be any kind of real estate investing guru, but what I have learned has been pretty exciting. You see, real estate investing does require a time commitment, but it can be worked according to your schedule and the money making potential is unbelievable.
Here's a little bit of the back story so you can see where I'm coming from.
My husband sells cars for a living. Last year, a man walks into my husbands office and asks if there is any way that he could trade land for a used car. The man had made the same offer at who knows how many other car lots that same day, only to be turned down. My husband has some real estate investing experience and recognized that this could potentially be a great deal. Turns out, the man had 8 acres of land to trade. My husband had connections with wholesalers of used cars and we ended up buying a used car at a wholesale price and trading the land for the car. We ended up only paying about $4,000 for the car. We estimated the land to be worth somewhere between $15,000 and $20,000 in today's down market. Not a bad rate of return.
Now here's the interesting part that I wanted to share. This all happened last year and honestly we had no idea what we wanted to do with the land. We knew that whatever we did, we wanted to absolutely optimize our profits. Here's the problem, though: real estate is just not selling very well and banks aren't lending like they used to. We wondered if we were just going to have to hold onto the land until the market came back. Could be 3 years, 4 years, 5 years or more, who knows.
Here's what we decided to do. We checked with the restrictions in the neighborhood and noticed that we could divide the land into two 4 acre lots. Then, we decided that we would owner finance the land. We'd sell each half at the price we would have expected to get in a good market, $30,000. Then we'd ask for $5,000 down, 10% interest for 30 years without regard to credit history. Now this would mean that we would receive a monthly payment from the owners of $219.39 basically for 30 years. Now $219.39 a month is not going to allow me to hire a personal chef or limo driver. After 30 years time, though, we will have collected a sum of $83,980.40 on half of the ground!
This means that on our $4,000 investment on 8 acres of ground, we would have the potential of receiving $167,960.80. Now that's what I call optimizing an investment.
There are quite a lot of people out there with land they'd like to sell that's just not selling. They simply do not know how to sell it in this market so the possibility to cut a sharp deal is there.
Now I have learned that it is possible to invest in real estate without a lot of money in your pocket and you really don't need to sit back and wait for some guy to come offer you the kind of deal that we got. If you are interested in finding out more, I'd recommend reading a book by Dean Graziosi called Profit From Real Estate Right Now! The Proven No Money Down System For Today's Market. I'm not getting any money to promote his book. I've read the book and he explains in detail how to make money from real estate without any money what-so-ever. Again, I want to emphasize that I am not getting any money from anyone if you buy his book. In fact, I would just recommend checking with your local library to see if they have a copy.
I plan on venturing into real estate this year and will be sharing every detail of whatever I do with all of you. If I fail, you'll know about it. If I succeed, you'll know about that too. One thing is for sure, though, we're going to learn something about real estate investing together!
