Building Wealth in Chunks

Transcription

1 Building Wealth in Chunks Cash Flow for Life July 2015

2 Dear Reader, This month s Cash Flow for Life Letter will be a bit more laborious than our others. However, the profits with this idea are thick and ripe for the picking. It s in the most lucrative sector of all: U.S. real estate. Don t worry, you don t ever have to buy or sell a property if you don t want to when using this idea all you have to do is set up a system to become a deal finder. Becoming a real estate wholesaler is easier than you might think; all it really requires of you is marketing. The difference between an average real estate investor and a professional is the pro markets for leads. Looking through Craigslist is how an average investor approaches real estate investing. Posting ads on Craigslist, looking for buyers, sellers, and other investors is how a professional approaches real estate investing. You don t have to go full-time to treat real estate investing like a professional. The same goes for stocks just because you re not full-time in the stock trading business doesn t mean you can t apply a strategy that the most successful traders use. I say this because I don t want you to be reluctant to apply some very profitable strategies to your next real estate investment. Anything we do in life should be worth doing right every time. Real estate investors who are looking for a property on the Multiple Listing Service (MLS) today are never going to find a good deal. The best deals are always off the MLS, and the most profitable ones are not even found on Craigslist or any other public domain. Deals that will dramatically increase your wealth are the ones you discover for yourself. As a part-time real estate investor myself, real estate has helped me build a lot of wealth in chunks. Occasionally I sell properties for a profit, but I am more of a buy and cash-flow investor. However, even when I buy and hold, the equity capture on the buy usually adds a significant amount of digits to my family s net worth. Real estate is an ideal way to create a massive amount of wealth because the numbers are larger than most of the other investments you will have direct participation in. The leverage of being able to hold a million-dollar asset with $100,000 is where real estate beats stocks over the long term, in my opinion. An apples to apples comparison always shows stocks beating out real estate, but this is because the math is quite fuzzy. If you buy $10,000 worth of stock and the stock rises 10%, you made $1,000. Using the same $10,000 to buy a $100,000 property, if the property rises 10%, you just doubled your money (cash in the deal). Now, you can do this with stocks, though I still don t think it is a good comparison since most stock option strategies that are comparable to the leverage in real estate are highly speculative. 2

3 1 Market for Leads FindMotivatedSellers.com has a great program to find vacant houses with high equity. You can also use it to find people who have purchased a property with cash in the past 90 days in the zip codes you re looking at. They even help you send letters if you don t want to print and mail them out yourself. Sending a mailer to a distressed seller (vacant home) or an investor (cash buyer) will help you find the good deals that are off the MLS, and assist you in finding buyers or equity partners for your deals. Don t have the money to buy a program like the one I just mentioned? No problem. Start running ads on Craigslist and other websites, with things like looking to buy homes or call me to buy cheap houses. Market towards both distressed sellers and active buyers. Even if you don t have anything to sell, you want to find buyers that are ready, because you don t have to buy or sell real estate to make money. 3

4 2 Wholesale If you have a list of buyers from your ads, when you do find a deal, you can simply put it under a contract and then sell the contract itself. Let someone else close it! Contracts shouldn t concern you. Anything written down on a piece of paper and signed by both parties is considered a legal contract. A lot of investors shy away from wholesaling, for fear of not having the right paperwork, but don t worry, just make up your own. Or better yet, download the free state-approved ones that the realtors use. Like any other business, you provide solutions. One day, a distressed seller is going to call you with the deal of a lifetime because of your ads. Maybe the house is going to foreclosure the next day and he needs to sell it now, for whatever he can get. Even if you don t have a penny to your name, you can put the property under contract, call up your cash buyers list, and inform them of the deal. Sell the deal to them for $5,000 or more, and then walk away with money in your pocket. Or buy the property, if you do have the money, or partner with your cash buyer list. Honestly, deal structures are infinite. 4

5 3 Build a Website and Find Bird Dogs A website, even if part-time, gives you credibility. This is especially true when advertising for bird dogs; a real estate bird dog is someone who finds you deals. There are hundreds of bird dogs in major cities who -- when seeing a vacant house, fixer-upper, or estate sale -- take a picture and send you the address for a small fee of $10. Ten of these leads might be bad, but you only need 1 to find a good deal. Having a bird dog helps you find more deals that are off the MLS. Summary: Next month, I want to take you through 3 examples of wholesaling real estate. I think this is something you can easily do, and honestly, even a few deals a year could become life-changing. It can mean earning an extra 5-, 10-, or 20-thousand dollars a year just by flipping a contract to a list of buyers that costs you almost nothing to build. Advertising on sites like Craigslist costs you nothing but time. You can always scale it higher with Facebook and Google ads, or speaking with the top realtors in your area. For realtors, you want to be the company that can take a bad listing and turn it into a sale. Establishing a good relationship with realtors is in your interest, too, because some of those leads that call you might not work for you, but they will work for a realtor, who is legally allowed to pay you a marketing fee. This is also something that just may happen to be 25% of whatever their commission is. Every day, every month, and every year, ask yourself what have I done to build up my cash flow? It is our objective with this letter to help our members look back on an annual basis and see that they have increased their net worth and income. If we make income a priority, I believe our net worth will rise as a derivative of those efforts. Best Regards, Daniel Ameduri 5

6 1 Legal Notice This work is based on SEC filings, current events, interviews, corporate press releases and what we ve learned as financial journalists. It may contain errors and you shouldn t make any investment decision based solely on what you read here. It s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the worldwide web), in whole or in part, is strictly prohibited without the express written permission of Future Money Trends LLC. 6