| You can now have passive, positive cash flow from
rental properties while eliminating all management
worries! The key is a land trust. This might not sound
exciting, but it is the lynch-pin of this amazing new
System.
Start with a piece of investment property, one you own
(maybe can’t sell?) or run out and buy one. Even if you pay
full retail, this System will generate a positive cash flow
and a nice profit.
Then advertise the property for sale to a selected target
market: those who can’t or won’t qualify for bank financing.
FOR SALE, SELLER FINANCING!
There is a “shadow market” for real estate consisting of
self employed people, small business owners etc. who would
rather undergo a frontal lobotomy than submit to the bank’s
investigation process.
And there are those who simply have stinky credit!
These are Motivated Buyers. They have the capacity and
desire to buy your property, but they cannot or will not go
through the hassles of getting bank qualified.
You’ll give them their chance of a lifetime, to buy
property with small upfront cash with No bank hassles! They
will gladly pay you 10-20% more than your property’s
Fair
Market Value.
You don’t have to pay off your mortgage since the
property is in a land trust.
You take 5-10% cash deposit upfront, or a car or speed
boat. You make the rules, you da Bank!
Your buyer makes mortgage payments to you that are higher
than your payments by several hundreds of dollars per month
since his payments are based on a higher price and you’ve
added a point or two to the rate on account of the fact that
you want to!
We have found that Motivated Buyers are so grateful for
the opportunity you have given them, they will not object if
you politely suggest splitting future appreciation of the
property, as long as they are using your mortgage. “Equity
Sharing” has a fair sounding ring to it.
Let’s see the results:
You have become a banker!
1. You have “sold” your property for a nice gain,
recouping most of the cash you put down.
2. You receive passive income every month
3. You receive your profit in a lump sum when the new
buyer refinances or sells the property
4. You will also receive your share of the appreciation,
if any
Example:
Single Family House*, FMV $200,000 (that you can’t rent
for enough to make money on!)
Mortgage, $180,000 @ 6.5%; $1132/mo
Sell for $240,000
Mortgage $220,000 @ 8.5%; $1,680/mo
You also get 25% of the appreciation above $240,000, if
any
You put $20,000 into your pocket and collect $548 per
month!
If the buyer sells after 7 years, you will have made:
$20,000 upfront (no taxes due!)
$548/mo for 84 months or $46,032 (partially tax
sheltered)
Assuming no appreciation, you get none. If there is 5%
annual appreciation, your share would be $15,900
Also about $2,109 in net principal reduction.
That is a total of $69,273 with no appreciation, $85,173
with.
*Note, if you have a multi-family property, the trust
allows you to sell each unit separately, skyrocketing your
profit. If it is a vacation property, you can sell
Timeshares!
All this with no tenant, toilet or trash headaches! These
“burdens of ownership” belong to the owner living in your
property. So do the advantages; like writing off mortgage
interest and real estate taxes, a land trust exclusive
benefit.
And you don’t owe any income taxes on your gains! The IRS
says that as long as the property’s title remains in trust,
the sale is “incomplete” and therefore the tax liability
cannot be ascertained. When your buyer sells, you do a 1031
exchange.
OK, someone will ask, what happens if the new owner stops
paying? Well, despite the fact that he is “the owner,”
another quirk in the trust law gives you the right to put
him out in 30 days, just like an ordinary tenant! No time
consuming, expensive foreclosure!
You now have a System for producing passive income with
no hassles that you can use, “Cookie Cutter” fashion,
anywhere in the country!
Copyright 2006 Bill Young. If you would like help in
implementing this exciting new concept, click here:
http://www.motivatedsellersonline.com/custom/index.cfm?id=58818
Bill is a former bank loan officer and licensed financial
consultant. He writes and lectures on various advanced real
estate matters such as land trusts, tax liens and the use of
IRA funds to purchase real estate:
http://ARealEstateIRA.com
Article Source:
http://EzineArticles.com/?expert=Bill_Young |
