Power of Big Money
I saw an article in a recent issue of Forbes about guy who is buying foreclosed properties at the steps. The article relates how he bought 2 properties worth $725K for $400K each using $120K in savings and $680K from a line of credit. He sold the homes 6 weeks later for $689K each, and netted $485K from the total transaction.
Not bad for 6 weeks work. Now this guy had a credit score of 819, which allowed him to get preferential treatment from the bank offering the 680K mortgage. The article didn’t say what his income was. However, you can see what a really good credit score can do for you. Now, most folks don’t have credit scores in that range.
Now, as big money goes, the $800K that this guy used, sounds like a lot, but it really isn’t. Let’s suppose you really wanted to flip houses in bulk. After all, most real estate investors know how to do this. They just don’t have the money.
Well, suppose you found some private lenders, that you agreed to pay 15% for the use of their funds and that money would be paid back in 3-6 months. That’s a pretty awesome return on their investment. Furthermore, why buy properties on the steps? It’s hot, sweaty, takes a lot of time, and your carrying around big cashiers checks you may or may not use.
Better, call the banks directly and ask for the REO department. Now, if you want to buy a single house, they may not be interested. However, if you want to buy say 10 per month, that will not only get their attention, you can probably get an even better discount. In fact, a colleague of mine is doing exactly that, and picking up homes at 40 cents on the dollar.
Now suppose after all is said and done, he makes $100,000 per house and is selling them well below market. That would net him $1 Million per month! Great plan–yes? If your buying 10 homes at $200K each, that’s $2Million per month of funding. So all we need is the money.
Unless you’re fantastically wealthy this is not a game you’re going to be playing with your own resources. You’ll want to be talking to high net worth individuals like angel investors, private fund managers, and financial planners with high net worth clients. For some this would still be too small an investment. And there are others that would be excited to participate in the opportunity.
Want to get stared. There’s some groundwork and preparation you’ll need to establish yourself as a credible investment option to these sophisticated investors. Doing so, is a pretty straightforward process.
To get started I highly recommend you get your hands on my “Show Me the Money” training manual. There are several chapters devoted to raising private money, including millions from high net worth individuals. Just use this link or click on the icon on the right side of this page.
Do this right and the current foreclosure crisis will make you one the high net worth individuals your desiring to borrow from right now.
Richard Odessey has been investing in Real Estate since 1999 and have bought, managed and sold over $5MM in assets over that time period. He has created a national network of RE investors that are a source of continual on-the-ground intelligence. Richard has also developed unique and proprietary tools to zero in on only high profit-low risk transactions.
