Investment Strategy #9: Creative Real Estate Deals


As if the strategies mentioned aren't creative enough, one thing you should realize (especially when just starting out) is that there is a world of real estate possibilities that you can participate in right now. It doesn't matter if you're short on money, don't have much time, have bad credit, or little knowledge. You just need to take a look at what you do have and find other people to contribute what you lack. This is called leverage. Leverage means you use other people's time, money, knowledge, or skills to help you (and them) make money.

One investor, a month into working with us, thought he didn't have anything to contribute till he found out his location was something he had to offer. He was living in Utah and met a California investor in our community. California home prices were too high to profitably buy and rent out, but Utah was just starting to see tremendous appreciation. The California investor bought a duplex in Utah using their money and credit, and the Utah investor, who lived only a few blocks from the rental property, landlorded. They both made money that neither of them would have otherwise, and the new investor got first-hand landlording experience.

Another investor found out an $800K apartment complex could be bought for $600K. He received $50K from passing that information on to a more seasoned investor. You don't have to be an expert at every strategy when you have a network of investors to pass deals on to.

If you live in a house for two years you don't have to pay capital gains tax when you sell it. Some investors have gotten very good at buying run-down homes in areas that are about to experience significant appreciation. They buy the home, spend two years fixing it up, and when they sell it they make $100K+ with all the appreciation and improvements they put in. They then move into another house to fix up and let appreciate while living on the money they made on their previous sale. One new investor knew that his family had a piece of land that had appreciated greatly, but his family had no plans to do anything with it. With some newly acquired knowledge they refinanced the land and the investor got $60,000 to put towards new real estate deals.

Many new investors don't know they can use 401K's and IRA's to invest in real estate. There's a lot of money sitting in under-performing mutual funds right now, and if you can promise a better return than the stock market you can combine many people's accounts to fund your real estate deals.

As you learn how real estate works and spend time around other investors, you'll find many ways to work with other people's resources to make you and them wealthy.

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