“15 Lucrative Income Streams In Real Estate”
About one and a half years ago, October 2006, I decided to take a plunge into something that I knew absolutely nothing about after attending a Get Motivated Seminar at the sports arena where the Detroit Pistons basketball team plays NBA Basketball in the city of Auburn Hills, Michigan. The arena was full of people who wanted to hear from great speakers such as ESPN’s Dick Vitale, former U.S. Secretary of State Colin L. Powell, former mayor of N.Y. City Rudy Giuliani, motivational speaker Zig Ziglar and several others.There were additional speakers who spoke about creating wealth in areas such as stock market investing and Real Estate Investing. Those investment topics caught my attention.
I signed up to learn about Real Estate Investing as a means of generating additional income and creating wealth.At the time I knew only a few things about real-estate.I knew that real-estate involved realtors; driving around for days, weeks, and sometimes months looking for a property; looking for and finding a bank or a mortgage company that will loan you money to purchase your new house.Additionally, I knew that being qualified and approved for a loan to purchase a new house, consultation with a real-estate attorney to make sure all of the legal stuffs are in order, and working with a title company were components of real-estate.At the time I knew that much, which wasn’t much at all.However, prior to then, I had been able to go through the process three separate times to purchase my primary residence as I moved from one place to another.
One month after the seminar, I proceeded to attend a three day introductory class to Real Estate Investing.There I found out that there were about fifteen or so different income streams in Real Estate Investing.I was shocked and amazed.Here I was a professional in a different industry sector, confined to my area of expertise and not opening myself up to learning about other things which were happening around me. (The point here is that one needs to continuously learn and grow – learn about things outside of your area of expertise, expand your comfort zone). I found out that one can generate a substantial income and wealth from any or a combination of the following areas:
·Real Estate Training – (You get to teach others)
·Property Management & Cash Flow
·Creative Real Estate Financing
·Discount Notes and Mortgages
·Manufactured / Mobile Homes & RV Park
·Fixing Up / Rehabbing for Profit
·Tax Liens and Deeds
·Commercial Real Estate Investing
·Land Investment & Development – Domestic
·Land Investment & Development – International
Some of these Real Estate Investing areas are considered earned income, some are passive/residual income, and some are portfolio income.Amazing stuff!In case you’re wondering how much it would cost to get trained in all of the areas above?Good question!How about a cool $130,000.00 plus? Some of these courses are set up so you can have a personal coaching for several months by phone; you get to have a personal mentor come and work with you hands-on for three days – this mentor actually comes to your hometown and work with you; you get three days classroom training (and of course you have to pay for your own transportation, room and board). I decided I could only afford less than a handful of these courses, so I signed up for Wholesale Buying, Foreclosure, Lease Option, and Creative Financing.I learned a lot, I traveled to places like Texas, and Florida, and Ohio to attend these courses in addition to iLinc “on-line lesson” via computer and telephone.Needless to say, I dropped a nice $50k to learn those stuff which I thought was well worth it.
The first thing I did after my first course, which was Wholesale Buying, was that I started driving around looking for deals.The first deal that I came across was a foreclosure auction (mind you, prior to this I had not taken my foreclosure class yet). During my first auction ever, I won a bid on a property that was in a mortgage default for $65,900.00.My winning bid was $700.00 plus a $3000.00 administrative fee to the auction company.For $3700.00 how can I go wrong?I was excited!Then it dawned on me that I have not even seen the property, no photos, nothing.I did not even know where in the city the property was located. This was a Real Estate Investor’s total blind date. Something kept telling me “you shouldn’t go home empty handed tonight – $3700.00?How can you go wrong?”I wrote two checks – one to the bank for $700.00 and another check to the auction company for $3000.00. I was told that a local Title Company will be contacting me in about 2 – 3 weeks for closing.I went home excited but nervous.I was excited because I’ve gotten my first deal, and nervous because I had no idea what I had gotten myself into.
After the auction it was too late in the night to go and check out my first real-estate investment deal.The next morning, I took a drive and found my property boarded up and pretty close to the war zone. The house was a two-story du-plex with aluminum siding missing from the ground level to about three quarter distance up on the second level.It appears the aluminum was missing due to scrap metal’s lucrative potential for the small-time neighborhood entrepreneurs.Immediately adjacent to my house, on one side, is an empty lot followed by a building that is completely un-salvageable – I think it needs to be bulldozed because it’s an eyesore; and on the side of the house are series of empty lots which extend all the way to a very busy street (and across that street is employees’ parking lot at one of the major medical facilities in the city – directly adjacent to the parking lot is the hospital).Directly across the street from my house are several decent nicely kept houses which are still occupied.My new house looked like it had been boarded up for a while.The front and side doors had padlocks on them so I was unable to go inside to check out my new investment deal.
Two weeks went by, I had not heard from the Title Company about closing.Three weeks and one day went by, I called the Title Company and I was told that they knew nothing about closing on that particular property; and that they had not heard from the bank.So I called one of my contractor friends to go with me and check out the property even though I hadn’t heard from Title Company about a possible closing date.When we got to the house we noticed foot-steps in the snow from the left-side of the house towards and around the back of the house ending by a window on the right-side of the house. It appeared that someone had been staying there.Since we had no keys to enter the house properly, we entered through the same window just like the person or persons with the foot-steps in the snow.The stench and garbage inside were awful. With flashlights, we inspected the interior of the house; luckily no one was inside the house to result in any negative encounter.The walls, ceilings, doors, windows, tiles, floors, 2-bath rooms, 2-kitchens – all needed major attention.For $3700.00, I am still thinking “it’s going to be okay.”After-all, I’m an investor now – “I will make it work,” I said to my contractor friend.
After I and my contractor friend came out of the house through the same way we got in, we proceeded to inspect the exterior of the house.That’s when we noticed a “For Sale” sign posted on the front of the house.Mind you, we did not notice this “For Sale” sign when we got there; I think we were too busy paying attention to the foot-steps in the snow.
My house is For Sale?How can that be? This is a Mistake!I bought this house at an auction and I got papers to proof it.It’s got to be a major Mistake.My contractor friend says to me jokingly “call the listing agent and find out how much they want for your house.”Good idea!So I called the listing agent and was told that the bank has it listed with them and that they’re asking for $9800.00. “MMmmmmm, interesting, thank you”, I said to the listing agent.Now I am really confused.“Why does the bank have my house listed when I just bought it at an auction?” I asked my contractor friend.“I don’t know,” he said.
Over the next day and a half, I made several phone calls attempting to contact the auction company, but was unable to talk to a person.So I left several messages.About a couple of days later I received a letter from the auction company telling me that the bank did not accept my auction bid of $700.00 and that they would refund all of my money – which was a total of $3700.00 ($700 + $3000). The letter went on to say that the bank would put the house back on the market for interested buyers.I was somewhat left with mixed emotion – I was going to get my money back, however, this was also my first real-estate investment deal which I felt I could “make it work” with substantial return on investment.
I called the listing agent again and asked them “what is the lowest offer the bank will accept?”I was told $8600.00.I said “okay, I’ll make an offer but not for $8600.00.”The listing agent told me to go for it – “all they can say is yes or no,” he said.
Since I was going to pay $3700.00 total at the auction, I turned around and submitted my offer to the bank for $3700.00.On the offer sheet I stated that I would not pay for any back-taxes or water-bill.To my surprise, the bank accepted my offer.I closed on the property for a total out-of-pocket of $4165.00.Oh, by-the-way, the bank ended up bringing more to closing than I did – they ended up paying $5630.00 for a water-lien on the property.
I proceeded and rehabbed the property and now renting it for $800.00 per month ($400.00 for each apartment unit).In this economy, at that neighborhood, my house was recently appraised for $46,000.00.Not bad!
I have since completed my four Real Estate Investment training courses.I now have 5 rental units which are currently generating positive cash flow.I am now equipped with knowledge on real-estate that I never dream about prior to attending that Get Motivated seminar at the Palace of Auburn Hills in Michigan.I cannot wait for the housing market to turn around so I can “turn-on” my newly discovered pipeline full-scale.
The point here is that when you get a chance to learn something new or attend a seminar, don’t take it lightly.Go for it, spend some time and money and educate yourself.You may end up learning something or acquiring new skills that will last you a lifetime.
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Originally posted 2008-07-14 20:26:45. Republished by Blog Post Promoter