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Index › Property & Estate › Real Estate Websites
 

New Real Estate Investment System: Passive Income/No Management Headaches!

 
Author: Bill Young
 

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 cant 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 cant or wont 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 banks 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.

Youll 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 propertys Fair Market Value.

You dont 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 youve 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.

Lets 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 cant 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 dont owe any income taxes on your gains! The IRS says that as long as the propertys 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!

 
 
 

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