HOW TO MAKE $72,000 BUYING A HOUSE FOR TOP DOLLAR RICHARD ROOP
Monthly payments on their note are determined
The IRS publishes “Applicable Federal Rates”
by the available cash flow generated from the
each month. This is the minimum interest they
property. The “net” cash flow is the market rent
want a seller to charge you on a real estate note.
less expenses like taxes, insurance, Home
The current rate on a 9 year note is 0.92% a year!
Owner’s Association (HOA) dues and a fixed
By using this low rate you will rapidly pay down the
amount we’ll set aside for ourselves to cover
note principal each year -- paid for by the income
future
you get from your occupant.
vacancies,
re pairs
and
maintenance.
Remember, we do not want any of our money put
into a property, now or in the future. Avoid the
Normally there will be a balloon payment due to
mistake of feeding properties. Only offer a seller a
the seller on the “maturity date.” So, on a 9 year
monthly payment that the property can easily
note you’d sell or finance the property by the end
afford.
of the term to pay them off. Of course you have the
option of asking the seller to extend and can give
Ask sellers to take the lowest possible interest
them some incentives to do so, if desired. You can
rate on their note. This reduces our expenses and
also pay off the seller sooner if you sold or
therefore increases our offer price. We can also
refinanced early. But they must agree to a
demonstrate to a seller that they will pay less in
discounted "Early Pay Off Schedule” upfront to
income taxes by taking a higher price and a lower
ensure you make your desired profit.
interest verses a lower price and higher interest.
That’s because interest is normally taxed at a
How to Lock In Your Guaranteed Profit
higher rate than any gain they get.
Your profit on free and clear deals equals the total
received in cash now, cash flow and cash later:
1) You always collect $10,000, $20,000 or more
when buying for cash now.
One way to generate
huge profits per deal
while offering sellers top dollar,
is by using the “free and clear
real estate investing strategy.”
2) You then add up your total positive cash flow
over the years, taking into account increases in
market rent for your cash flow.
3) You then project what you could sell the
property for at the seller note maturity date, taking
into account some modest and conservative
appreciation. Your backend profit, or cash later,
the future resell price less selling costs and loan
payoffs.