That was my day yesterday I purchased another house in Cleveland Ohio. This was special because the property was deeply discounted, I was able to buy it with no money down and I walked away from the closing table at $13,400.00!
Hey Mike I thought the cash at closing days were long gone?!?!
Wrong! Being creative in real estate will never go away!
Once rehabbed, I could probably flip this one to my out-of-town cash flow investors for $28,000.
This same property will rent for $650-$700 per month
So here was my strategy with this deal:
I went to one of my private lenders to borrow the money to structure a 100% finance deal. My lender has a $20,000 minimum loan amount. My mortgage payment on this is 667.00 for 48 months on $20,000.00
So I purchased the property with the $20,000 loan and I walked away from the closing table with $13,400. I could have the place rehab in rent ready for $3000.
I have potential tenants beating down the door right now to rent this property for $650.00 per month.
Right now you’re probably thinking really Mike you have a $667 mortgage on the property that can only rent for 650+ taxes you’re going to be at about 760. That’s a negative cash flow deal!
No worries I’ve got that covered I still have $10,000 to play with. The 10,000 is going into another single-family home that will generate an additional 650 per month. From that 650 I’ll pay taxes and insurance on the new property plus the clean up the negative cash flow on the property discussed above which will leave me about $400 positive cash flow from this deal!
But it still gets better, The $10,000 that I used to buy the second property that’s bringing in the additional 650 has no lien attached to it it’s a free and clear property! So what if I decided to flip this property to one of my cash for investors for $25,000?
I could take the new $25,000 from the property I flipped, buy two more properties that we bring in $1300 per month and cash flow offsetting the little bit of net negative cash flow from the original deal and adding roughly $1000 per month positive cash flow to my bottom line with no liens. The possibilities go on and on with this!
The point is when you’re disciplined with investor money and you know all the exit strategies you can create as many deals as your mind can possibly imagine. This is the beauty of real estate there are countless ways to turn the odd situation into a great situation!
Are you still on the fence and waiting to get started? This deal took none of my own money and I was able to do multiple strategies utilizing it, then walking away from the closing table with $13,000. How many other businesses can you do this in?
I hope these post help motivate you to get out there and take action! You don’t have to bet the house on your first deal I encourage you to start with a small deal and get as creative as you want with it or as simple as you want just to get your feet wet. Your confidence encourage will grow with every deal and the possibilities that open up to you will blow your mind is your portfolio grows.
If you truly have a passion for real estate get out there and take action continue scouting deals and purchase your next property in the coming weeks!
If you have investment questions reach out to me that’s what I’m here for until next time good luck and happy hunting!