Land contracts, Contract for deed or whatever you want to call them are a great way to make a property maintenance free.
In this economy you really have to look at what people need today. Banks and Loans are very hard to get. The government is even going to set up more restrictions to get loans.
With all this crazy stuff going on I think land contracts will help you cash in on real estate. The first way to make money is with the First Time Home Buyers Program. A lot of people don't know that you can be the recipient of that $6500-$8000 from the government. If done properly a investment property can have a land contract on it and receive the first time home buyers program.
The other benefit that you get is usually a higher monthly return. The way I set mine up is not based on the interest rate. I look at my desired return on monthly payment. Then I add in the interest rate based on the payment.
I set up a straight line deprecation. You can set up a principle reduction that stays the same over the life of the contract. For example if you are getting $950 a month and you can set up monthly principle reduction of $100-$150 a month for the life of the contract. This simplifies it for you and the client plus makes you more money.
Setting your land contracts like this makes them more valuable. So if you want to sell your note this will help you move it on the open market.
The last thing I want to mention is the low to no maintanence. Think about it, do you call the bank when you have a problem at your home? Of course not so why should
the client call you for anything? Your the bank.
Do keep you mind open to new ways to make money in this market. Brett Young Valley Realty www.rooftopprofitmax.com or call 602-363-6551
No comments:
Post a Comment