Creative Real Estate

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Unlimited wealth is a definite possibility if creative real estate investing techniques are used.  There are numerous ways to make money in real estate.  A self-assessment will help to determine what area would be the best road to take.  Specializing in a specific sector of the business will, in some cases, make others come to view you as the expert in your field.  Do you want to buy only single-family houses, multi-family or both? 

Have you considered mixed-use properties (i.e. stores+rental units)?  Mobile homes are extremely profitable in some areas of the country.  Do you want to purchase and hold real estate mortgage notes or buy tax lien certificates? Do you want to learn how to negotiate real estate transactions? Are you the landlord type or do you like "flipping" properties?

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Below are some of the best creative real estate techniques used by some of the top real estate investors in the business.

No Money Down

Yes, you can buy real estate with no money down.

Wholesaling of Rehabbed Properties

Wholesaling rehabbed properties is very lucrative if you know the ins and outs.  Wholesaling is a term interchangeable with "Flipping".  This is the concept of purchasing properties, doing minor renovation, and quickly turning around and selling to another investor or owner-occupant for a fast profit.

Short Sales

This technique is used when a homeowner is in foreclosure and you and the homeowner agree to negotiate a short sale with the mortgage company to accept less than the amount that is owed.  This also works well when you locate a property where the equity in the property is less than or close to the purchase amount.  Short sale leads are easy to locate.

Lease Options

This creative technique has several names--lease option, lease purchase, lease to own, rent to own.  The basic idea is that the resident has the option to purchase the property at a future date at a specified price.  The  advantages for an investor is that 1) the purchaser must make a deposit call an "option consideration" it the equivalent of an "earnest money deposit" given when purchasing a property 2) if the resident does not purchase the property, it still belongs to the owner/investor and it can be re-rented or re-optioned 3) a lease option generally calls for the residents to assume the bulk of the maintenance and upkeep of the property and relieves the owner of much of this headache.

Master Lease

Utilizing a master lease is a powerful technique which can allow you to purchase larger properties such as apartments with only a small amount (option consideration) down.  A master lease is an agreement that is executed similar to a regular lease option except that you are leasing a building with several units with the option to purchase at a future date and your lease taking precedence over the other resident leases.

Agreement for Deed aka "Subject to"

There are homeowners who, because of various circumstances in their lives, no longer want a property.  This could be the result of a divorce, death, inheritance, foreclosure, etc.  These owners may be willing to give your their deed with the agreement that you take over payments and they can walk away from the situation.

Owner Financing

If you are short on funds for a down payment or you have less than perfect credit, this is a great creative technique to use.  It involves negotiating with a homeowner to accept the down payment in the form of a second mortgage.

Assumable Mortgage

An assumable mortgage has a clause that allows a purchaser to take over a mortgage and note simply by filling out some paperwork and paying an assumption fee which is determined by the bank or mortgage holder.  These types of mortgages, if you can find them, are like "gold".  There is no qualifying in order to assume the mortgage and the terms of the current mortgage remain unchanged.