Monday, February 04, 2008

Earn Big in Real Estate Without Owning It

OWNING REAL ESTATE HAS MANY ADVANTAGES. One of the best advantages is that it can make you a millionaire sooner than you think. But some people prefer not to own real estate. Instead, these people:
  • Lease real estate at the lowest price they can get.
  • Lease the same real estate at the highest price they can get.
  • Earn their profit on the difference leasing prices.

ONE OF THE BEST EXAMPLES of this method at work is that used by a successful real estate wealth builder:

He leased trade show exhibit space for 25 cents per square foot. Then he turned around and leased the same space to trade show exhibitors for $25 per square foot! His income from the exhibitors to whom he leased a total of 150,000sq ft = $25 X 150,000 = $3,750,000. The cost to him of this space = $0.25 X 150,000 = $37,500; profit = $3,712,500!Of course, he had NO ownership of the real estate he leased and then sub-let to others. This didn’t bother him since he had the immediate profit from sub-letting his leased space.

YOU CAN ARRANGE SIMILAR DEALS with many different kinds of real estate. Thus, you can:

  • Lease residential apartments and sub-let them to others at a higher rent than you’re paying.
  • Lease commercial space for stores and sub-let it to groups of merchants needing a minimum amount of area.
  • Lease open land and use it for parking or temporary storage of large construction equipment.

YOUR WHOLE KEY IN EARNING FROM REAL ESTATE you don’t own is to have a sub-let clause in your lease. Write the lease so there is no restriction on your sub-letting of the space you rent. Then you can:

  • Sub-let your space to anyone of your choice.
  • Sub-let at a rent YOU set based on the tenant YOU find.
  • Sub-let to as many tenants as you choose.

SUB-LETTING REAL ESTATE can give you instant income when you receive your security deposit and first month’s rent. Try it and see!

Make Big Money in Real Estate in a Down Market

WE ALL HEAR TALK ABOUT the "sub-prime mess" and the foreclosure fallout. Does such talk mean that real estate is no longer a good investment? No! Real estate is still the best investment you might make! Thus:

Two years ago one of our readers bought a vacation home in an upscale area. He paid $700,000 for the vacation home, using all borrowed money. For 49 weeks of the year he has a local real estate agent rent the house to vacationers, giving him an excellent income that more than covers his mortgage payments. Just this month, 24 months after buying the house using borrowed money, he was offered $1.4-million for the house he bought for $700,000, using borrowed money.

THUS, IN 2 YEARS, THIS BWB earned a gross profit of some $700,000. That's $350,000 a year, or $29,166 per month, or $972 per day for a 30-day month. And all of this took place while this BWB held another job. So what lessons can you draw from this?

Here they are:

  1. Real estate in wealthy areas is holding its value because buyers of such properties have not been affected as much by any economic downturns.
  2. Real estate in wealthy areas continues to rise in value because desirable properties have an ongoing appeal to buyers who have money.
  3. Real estate in wealthy areas is much easier to finance with borrowed money because lenders are happy to loan on properties in well-known upscale communities.
TO LOCATE FOR-SALE PROPERTIES, in upscale areas, take these easy steps as soon as you know what types of property you want to handle:
  1. Contact upscale real estate brokers in the area. Tell them you're interested in buying higher-priced properties. Ask them to see if you can get into some properties with owner financing. This will help you get into good deals with zero cash.
  2. Get the word outto wealthy people that you're interested in making quick deals for properties they want to get away from.

Surprising as it may seem, wealthy people DO, occasionally, want to get rid of properties in a hurry. That's where you come in! You take over the property with a low-cost Option and make every effort you can to sell it before your Option expires. What you're doing is building your wealth on the wealth of others!