Posted by Clint on July 15, 2006 at 10:43:47:
hmm…wealth through debt. Don’t suppose that is how Trump made his Billions.
Do it conventionally and you will still make $
e.g. 20% down on a 100K house is financed @ 7% NOO property.
80K Note: $560 per month piti
Rents for: $950 (lets be conservative)
$390 per month cashflow * 12 = $4680 per year
Tax write off: ?
Appreciation: ?
House being paid of by someone else, priceless.
“Is Creative Real Estate Wise?” - Posted by Winston
Posted by Winston on July 15, 2006 at 10:14:59:
Hello Folks,
OK, I’m new to creative real
estate and all that. But I’ve
been reading some articles from
CREOnline.com and other sites
and here’s the basic idea I get
about creative real estate:
A way to get rich by getting
into debt
Correct me if I’m wrong, but it
seems creative real estate first
of all gives one a negative
net worth before he now begins to
gradually build equity.
Expecting your responses.
Winston
Re: “Is Creative Real Estate Wise?” - Posted by Ed Garcia
Posted by Ed Garcia on July 16, 2006 at 11:56:33:
Winston,
So many times I have people ask me what is Creative Real-estate and what is the difference that makes it creative?
So I thought I?d spend a few minutes this morning explaining this for those of you that were not sure.
Creative Real-estate is the ability to purchase real-estate other then the conventional ways available.
Many people think investors who do Creative Real-estate, do it because they don?t have the funds or credit to do conventional financing. That is NOT true. Many of us who have the way to go, will always attempt to do a deal with less exposure. In my previous post I?ve always referred to this as RISK/REWARD.
There is no question that if you have no money or poor credit then you?d have to do Creative Real-estate out of necessity. I?m sure you?ve all heard the coined term of; ?Necessity is the Mother of Invention?. In Real-estate investing, this is called Creative Real-estate.
I?m sorry to say that the term ?Creative Real-estate? has been given a bad connotation in the Real-estate community. Don?t be concerned, any time you show the ability to think outside of the box you?re going to create ?mistrust?.
This ?mistrust? can be circumvented with an appropriate presentation. As Zig Ziegler once said. ?She has a face that makes all time stand still?, that sound pretty doesn?t it. Then he continues to say, ?Or you can say that, ?she has a face that can stop a clock.? Now it?s that little bit of difference that makes all the difference in the world.
Presentation is one of the main things I stress in my workshop when teaching experienced investors how to obtain working lines of credit from the banks to do their deals.
My point is, if a creative idea is properly presented, it doesn?t seem as creative and can be much easier for those who think in the box to accept.
Once you begin to understand Creativity and Creative Idea?s, this thinking process can be adapted to any challenge or task you take. All of us have had creative ideas from time to time, we?ve just never thought about it or realized the value of developing our skills or ability to be creative.
Food for thought,
Ed Garcia
Re: “Is Creative Real Estate Wise?” - Posted by Larry K
Posted by Larry K on July 16, 2006 at 09:13:12:
The advice given on this website is to purchase below market value. This gives one instant equity and positive net worth regardless of the financing terms. For example, I purchase a house for $60,000, make $10,000 in repairs, have house appraised for $100,000. My liabilities increased by $70,000, my assets increased by $100,000, so my net worth increased by $30,000. If I do this 33 times, I am a millionaire. That is not incuding the appreciation, equity growth, and tax benefits.
Of course you are relying on the market. That is why it is called investing. In the above example, if the market decreased by 20%, I would still have equity.
This is what makes REI such an appealing investment option.
CRE Online just teaches you ways to do it better.
Re: “Is Creative Real Estate Wise?” - Posted by Eric (MI)
Posted by Eric (MI) on July 15, 2006 at 22:44:44:
Actually that sounds like “traditional” real estate investing such as buy (traditionaly) and hold.
Re: “Is Creative Real Estate Wise?” - Posted by Sailor
Posted by Sailor on July 15, 2006 at 18:59:32:
I like to think of my deals as creative, but I haven’t had any kind of
loan in the past 15 years. CRE just means using your noggin–
Tye
Re: “Is Creative Real Estate Wise?” - Posted by ken in sc
Posted by ken in sc on July 15, 2006 at 18:05:26:
What you just described is not creative real estate. It is standard real estate. Standard real estate investing is to buy a property at market value, the hold on to it for cash flow and appreciation. And that can make you money. But that is not what is talked about on this site. Here at creonline, we talk about all types of ways to make both short and long term money in RE, but smarter that typical ways to make substantially higher retutnrs, both in the form of quick resale for profit and higher than typical cash flows. Also, many times we talk about how to do this without investing much if any of our own money into the deal.
Read on, and see if what we talk about interests you more than the typical real estate scenario that you described.
Ken
Re: “Is Creative Real Estate Wise?” - Posted by Mike-OH
Posted by Mike-OH on July 15, 2006 at 13:47:48:
Winston,
Keep reading because you didn’t get it. The idea is to buy at a large discount to market value. This gives you a positive net worth right from the beginning. The “creative” part just refers to how the property is financed and has absolutely nothing to do with net worth.
Mike