How To Legally & Honorably Sell A $200k House In California For $279k
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Read Transcript for “How To Legally & Honorably Sell A $200k House In California For $279k”
Do you have a house you need to sell for more than market value? Here is a case study of one of my mentor students who sold a $200,000 house for $279,000 and earned a $10,000 lease option fee.
“I live in California where the home values have dropped more than 30%, and in some places, 40%. I love your “For Rent Method” but I don’t understand how it can work in this kind of high end market with dramatic value drops. The only way it could work here is if you could sell it for way more than it’s worth. Can you sell a home for more than it’s worth if you sell it rent to buy?” – David Ansob, Santa Monica, California
Joe: Well, the answer is absolutely yes. I’ve got a student who just finished his second deal. His name is Ero and he put together a deal on a home. Its current market value is $200,000. It had a mortgage on it of $279,000 and he sold that property for $279,000 plus a $10,000 lease option fee. So he got $289,000 for a property, $10,000 that he put into his pocket, and he has a new buyer on that property who, if they exercise the option, will buy it at the remaining balance of $279,000. In the meantime, they’re going to be making rental payments, and he set it up so that it would be a little bit longer period.
Joe: We typically do one or two years and sometimes three year lease options – he did a five year lease option because he felt that that would give it enough time to come up in value so that they can make that work. He didn’t have any problem finding a buyer to do that. The seller was very relieved because if they had tried to sell this through the MLS and it was only worth $200,000, they would have ended up having to pay realtor fees and ended up getting about $180,000 – they’d be coming to closing with $100,000 in order to sell that property which they didn’t have to do because Ero bailed them out.
Joe: He found them a good buyer. The buyer was happy because for $10,000, they were able to get into their own home. They didn’t qualify for a regular mortgage; they didn’t have enough credit to do that. They did have a good job so they’re a pretty safe bet that they’re going to make their payments. They were able to get into the house with a little bit lower payment than it would have cost if they paid that full $279,000 with a mortgage. And they’re going to be able to call that home *their own*.
Joe: So they were excited about it, the seller was excited about it and of course, Ero was excited as well because he made 10 grand on this whole deal. I asked him, ‘How long did it take you to put this whole thing together?’ And he said, ‘Maybe 6 to 8 hours maximum to put it all together and make $10,000.’ So he’s making well over $1,000 an hour just doing this type of work. And the better he gets at it, and the better YOU get at it as you start doing this type of thing, the more you’ll make per hour because you’ll become more proficient with that process.
Joe: Ero is one of my mentor students. We walked him through it. He came to the buying event. We did this there and taught him how to do this process. When he went home, he was able to make it happen and put these deals together. And now he’s off, and I have great hopes for him to have a great business doing this because now he understands how it works.
Joe: Once you do it the first time, your confidence level goes *way up*. Suddenly it all becomes exciting and possible, and it gives you a lot of new energy to follow through with that process and build it. Then, once you learn how to start making money at it, I start teaching you how to automate some of these steps so that you don’t have to do as much grunt work, the job becomes a little bit easier, and you have a constant stream of leads – you’re creating a pipeline of deals that are happening all the time and you always have consistent money coming in, which is a very important thing to have a sustainable business.
Joe: The next step he’s going to take is to keep the properties. I’m going to show him how to keep properties for the long term and be able to build wealth. The“For Rent Method” and flipping properties only makes you cash, which is great – everybody wants cash and everybody needs it to build a business, but to become rich you have to have assets that are going to work for you and are passive income that’ll work over time. That’s the next step in the process in which we talk about doing some other zero down structures where you take control of the property and keep them long term, using “Subject-To” and “Multi-mortgage” and land contracts and other types of zero down structures. Good luck. Bye-bye.