gregorygarver.com

[Brandon]

I am very interested in getting into the real estate market. I had planned to deal with sub prime buyers. However the recent news about the sub prime market has changed my mind. I have an idea, and I am curious what some real estate people think about it! I have the credit score to be able to invest in real estate properties. I am thinking that I can finance residential properties, and then turn around a finance them myself to a buyer via a contract for deed, or something similar. I am figuring I can clear $150-$200/month per property. Here is what I think are the benifits...1.) I don't have to maintain the property like I would if I rented it.2.) I get a down payment so the buyers are more likely to stay in the house, and should have a lot higher retention rate.3.) I build a residual monthly income.4.) If I do take back a house, I refinance it for another 30 years5.) The buyer will be responsible for all taxes, insurance, etc.So what do you think? Good or Bad IdeaI think the people would be more likely to stay as they would be buying the house, and they would have an initial down payment tied up in the house.Personally if I have to take back the house thats fine, I just don't want to do it every couple of months like with renting...I think doing it this way most people would stay in the houses 5-7 years before they default.I know my uncle made millions by financing land like this in south georgia. I also think it comes into investigating the people your selling too, check them out and make sure they half way decent people with a good job history. I also plan on staying with the lower end houses to start with, so I don't have so much tied up in each property.But, please keep the opinions coming...and thanks!

[chris_sockets]

so you find some owner that does owner financing, you give him a down payment of whatever, 5% lets say, you are the owner, you turn around and try to sell it to someone else, for more money of course take their down payment, and put it to another house, rinse and repeat a few times, i think it all depends on what contract you get from the owner if he allows you to sell it, i heard of people doing this and was thinking of doing this myself, let me know what you do if anything , curious to know

[Mike2400]

The first problem is the bank is not going to like it if you try to deed the property to a third party... its a good way to end up in court.... it will be a violation of your loan.The second problem is there is enormous risk in doing this. If you dont keep these properties with someone IN them, you will lose your shirt. 1 month's interest is equal to 5 months profit....The third problem is you are dealing with people the bank wont touch... these are people that have a history of not paying their bills.... and you are going to give them a loan that costs them a lot of money.... probably more then they can afford. Your "product" will be expensive to them.The forth problem is your interest rate on anything besides your primary residence will be higher... and you will have to pass that rate on.The fifth problem is when people are getting evicted.... they tend to destroy the place. You will lose MORE money here.The sixth problem is the falling housing market could get you stuck with a lot of upside down properties.The seventh problem is your tax situation would be very complicated.... a CPA could give you more details here.So, yes, as you know, this is a very risky business venture. With great risk comes great rewards... that is what business is all about... but I think with current market conditions, current prices of houses, and everything else, there is just too much risk. If you required a large down payment (at least 30%) it would be a lot better... but these sub-prime borrowers do not have 30% to put down. And if they did, they could cut out the middle man (you), go to a bank, and get a descent loan there.This *could* work, and it could be easy money if everything falls into place and you get good "buyers".... but I think there is more risk then possible rewards.

[Gregg]

You should consider buying the properties subject to the existing financing thus using other people's credit and other people's money. Then lease option them.Research it if you are serious about investing.

[Mustbe]

Good Ideal.........2 out of 7 you will probably get back by owner financing.Thats how you make your money.Always make sure they have a good down payment,