How Do I Rent Out High Priced Properties?
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Read Transcript for “How Do I Rent Out High Priced Properties?”
Let me tell you how to buy and sell properties on a lease option instead of borrowing money or taking out loans to finance them.
“The challenge that I’m faced with is simply carrying costs. Three or four years ago, you could virtually buy any property and rent it out for positive cash flow.” – Rajav Guktah
Joe: I’m assuming you mean with 100% financing.
“This was on account of two primary factors.1) it was prior to the massive appreciation we’ve seen, and 2) interest rates were lower. Large amounts of cash to use as down payments are not available to me. The one investment property that I do own, I purchased by leveraging equity in my primary residence. The investment has done well but I’d like to be able to pick up some new things.”
Joe: First of all, never borrow against your current property (the property you live in) to buy your investments. Never ever do that. There’s no need to do that. Don’t take that risk. You can lose your property. You can lose the house you’re living in. People say, ‘Well, you’ve got to take some risks to do investing,’ and I agree; you have to. But you don’t have to take that kind of risk. Protect your house – protect the house that you live in. That’s the first order of business.
Joe: You also don’t need to go get loans to buy these properties, and you don’t need to wait until you get your next chunk of money before you can put down another down payment and buy another property. That’s just completely wrong thinking, so don’t buy properties that way – use creative financing to do it instead.
Joe: The way you find people that will do creative financing is by using marketing that works, so use the right type of classified ads and internet marketing and build lists of buyers, sellers and investors and you’ll be able to use this stuff. By building a list, what I’m talking about is an online database of these people. It’s not difficult to do if you have the right software and the right knowledge.
Joe: You just need to learn this process. You can get all of this information from my “Push Button Method”. That’s at PushButtonMethod.com. You can learn how to build the systems and how to build the marketing tactics.
Joe: But even if you don’t have any of that, you can still put a sign out in the yard that says, ‘I’ll buy your home.’ Or, ‘I’ll make a guaranteed offer on your home in 24 hours’ and your phone number. You’ll put deals together using that if you put them in the right places.
Joe: Do it handwritten. Do it on cardboard. Do it on Coroplast. Don’t make them fancy. Don’t spend money on these signs. These signs should cost you two bucks. You can get a piece of cardboard for 90 cents and you can get a couple of grape stakes or tomato stakes and staple them on there, get the yellow cardboard and write on there in black, ‘I’ll Make An Offer On Your Home Today’ and your phone number, or, ‘Guaranteed Offer On Your Home In 24 Hours.’
Joe: These are great ads and they will work. Make sure you put them into high traffic areas. They won’t stay up very long, but they’ll work.
Joe: Now, there are a lot of other things that will work and that’ll also be very effective if you get into some of these more advanced techniques that I teach.
Joe: Just get started; just do something. Take action on what you’re doing and you’re going to make money. Anyway, good luck to you and keep buying properties. Don’t let it stop you.
Joe: I don’t think I answered the question – you asked about the values going up. When the values go up on a property, one of the things you can do to sell that property is to sell it on a lease with an option to buy. Instead of renting the property, you’re selling it, so the buyer takes a whole new perspective from this property.
Joe: Let me give you an example of a property in California that I had. This was back in the 80’s. It was $495,000 if I remember right, and it had a payment on there, because the interest rates were very high at the time, of $4,300 a month. Now, you can go rent a house like this for about $2,700-$2,800 at the time, and I had to figure out a way to get that payment covered because I had to sell the property and I had the problem of selling the property because the market was going soft on me, so I had to find a way to get that thing covered because at the time I had the loan in my name. That was crazy; it was a crazy time, but I did it.
Joe: Anyway, I had to get the payment covered, so I went out and sold it on a lease with an option to buy. I told the guy, ‘Look, you’re making payments on this property that costs you $4,300 a month so you’re going to need to make payments on this property the same as if you were buying it. And if you can’t make that payment, you can’t afford this property.’ So he saw the logic to it, he bought the property, he’s making $4,300 payments, and he eventually exercised his option and took it over.