Government is not the "end all" answer to rescuing the plummeting values of Real Estate.
We the People...........specifically investors with cash (or other resourceful means), have the ability to buy affordable REO's and become part of a new wave of independent bankers (so to speak) rescuing Main Street. Your investor can sell their REO for market value on a land contract to deserving families. The investor (your client) helps:
- protect the value of other homes in the REO property neighborhood
- give buyers hope of home ownership without 20% down
- buyer get into an affordable home with deposit equal to monthly rent
- stabilize an otherwise deteriorating neighborhood
- sustain collection of property taxes for civil services
With a land contract, the investor becomes the banker and charges (suggested) 10%. Investors should consult with you to learn if land contracts or other similar sales can be offered in your state. Income to the investor is considered ordinary income. Investors should consult with a tax advisor before making any purchases as suggested in my blog posting herein.
It's great to tell your friends you just bought a $500,000 house for $300,000. What a bargain.............that is, until you have to make monthly mortgage payments until the house is leased or sold. I suggest working with banks and/or asset management companies to find REO's an investor or FIRST TIME investor could buy for cash.
WEALTH EVAPORATION is a major concern to everyone. Low cost affordable cash flow REO's are a SAFE Place for Investors to PARK Their Money.
Entrepreneurs are resourceful; they always find a way to take action if you present the opportunities. A few ways an investor may raise capital for an REO or other deeply discounted purchase are:
- HELOC on primary residence
- Retirement funds
- Rollover to Self Directed IRA
- Loan/s from 401K
- Roth IRA
- Corporate credit
- Get a partner (friends, family, investment club)
Your investor's may also:
- Season the note 12 months and sell
- Hold long term for cash flow as rental
The future of Main Street is really up to you. I hope my ideas will help stimulate the Active Rain community to bring more ideas to help turn the tide.
As for the "Press" and their doom and gloom for the real estate market.............not one of them ever helped me pay my bills. How about you?
Do you have some ideas to share?