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Vagabond Real Estate Investing
I'm sure that when you read the title "Vagabond Real Estate Investing" you'll say, like others, what in the world does that mean, I've never heard of it. Don't feel bad, neither has anyone else. The reason is, I just made it up when I started thinking there has to be a better place to invest in real estate than California. As I thought more about it I thought back to some of the rehabs I had done and the fact that we had to camp out in the house to keep what we brought in through the front door from going out the back door. Most of the time the property we were rehabbing was close to where we lived which meant we didn't have to live in them full time. This changes if the property is in another state. Now you either have to live in it full time which is not always feasible or live in a motel and eat meals out which gets very expensive. You aren't able to keep an eye on the property either. The next thought was how about a motor home or a travel trailer. This would solve all the problems of living, eating and keeping an eye on the property. That's when the name vagabond popped into my head. I figured a person could travel from investment property to investment property just like a modern day vagabond. The vagabond investor would need to have 4 things: 1. A self contained motor home, camper or travel trailer.
2. Be open to traveling.
3. Want to invest in real estate.
4. Have either the money or credit to do the first deal. To get started you would go online and search for an area where the property values were such that the payments could be covered by the rent. When you locate the area you then start a search for property that fits the criteria. When you have located several go ahead and make offers on them subject to inspection. These offers are going to be a lease with option to purchase. The option fee will be basically guaranteeing to make the payments and possibly giving them moving money. The property itself will likely be distressed in some way, such as a rental that needs work, a property in foreclosure or someone who just can't find a buyer. Right now these are plentiful. Now you become the vagabond investor as you head for your new investment. When you arrive you finish the deal and start rehab if it needs it (which it probably will). As soon as you begin work start advertising it for sale or lease option. Be sure you've put a clause in the original lease option that allows you to this. Most people you'll be dealing with won't care as you're making their problem go away. If you find a buyer you're way head of the game but if you haven't then a lease with option to purchase will be almost as good. You don't want to just rent it unless you like pain. The lease option does a number of things for you. Such as: 1. A quick sale normally at a higher than typical sales price because you're helping them become a buyer.
2. An option fee of 3-5% of the value of the property. You can use this however you like tax free.
3. Higher than typical lease payments which you can credit toward their downpayment if they are timely with the rent.
4. Someone who will care for the property like their own and make all minor repairs.
5. Less than 50% exercise their option to purchase so you can keep the option fee and extra rent.
6. The larger the option fee, the less you'll need to worry about their credit. During the time this is going on you can be looking for another property in the same area if you like it or in another area if you don't or you're just restless. I know the lease option part works great but like I say California is not the place to do it, unless you just need a tax shelter. I believe it would work just like I've laid it out. If someone out there would like to discuss it please don't hesitate to email me at don@profitinforeclosures.com.
I'm a retired real estate mortgage broker who still is somewhat active in real estate investing. Visit my website
at http://profitinforeclosures.com to get more information and I'll give you a free foreclosure, short sale and lease option report.
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Contributor's Note
Don't forget to pick up your free foreclosure, short sale and lease option report at http://profitinforeclosures.com
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PLEASE VISIT THE CONTRIBUTOR'S WEBSITE
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