When I began my career as a real estate investor in 1985, I stumbled across a little known area of real estate that had the potential to make us a ton of money.
This was an area of the market that went unnoticed by most people.
This was the area of abandoned properties.
How To Profit From Abandoned Properties You might pass these properties on a daily basis, but just never paid much attention to them.
You could be passing up hundreds of thousands of dollars in profits! These are properties that the owner has walked away from for whatever reason.
It could be a divorce situation, an illness, a death in the family, a job relocation, or any number of other reasons.
Do we care why? Absolutely not! Do not waste your energy trying to figure out why sellers do what sellers do.
A $58,000 Profit Right Across The Street I remember a young lady in one of my 2 day classes.
In the first day of class, we taught a whole day of unconventional ways to find profitable deals.
One of those methods was how to find and profit from abandoned properties.
The next day, the young lady came to class and told us an interesting story about an abandoned house right across the street from her house.
She said that when she got home from the first day of class, she put her key in her front door to go inside.
Suddenly, for no apparent reason, she stopped and immediately turned around.
Across the street was an abandoned house.
She had unconsciously seen the abandoned house every time she walked out of her front door, but until now she just never paid any attention to it.
The windows were broken out, the grass was high, there was trash in the yard, and on and on.
After the class was over, the young lady stayed in touch with me.
I had asked her to keep me informed as to the progress of her deal.
It took her around three months, but in those 3 months she successfully purchased the property, fixed up the property, marketed the property, and made a profit of $58,000! By the way, she had no money, no credit, and no job, but she was still able to make this kind of profit.
Why Abandoned Properties? When you work with abandons, you have an excellent opportunity to use the best financing in the world, which is seller financing.
There are several reasons why we prefer seller financing over conventional financing.
Rarely will a seller ask to see your credit report.
If you have credit problems, it usually will not become an issue.
Many times the seller is completely open to many creative strategies that will help to eliminate their abandoned property problem.
After all, what does the seller have to loose? His abandoned property is just sitting there not making any money.
The seller may have a mortgage to pay on it every month, because he wants to keep his credit clean.
More than likely he would like to rent it or sell it but he feels that he would have to spend a lot of money to fix the property up before he could market the property.
In the meantime, another month goes by and another mortgage has to be paid.
The taxes and insurance will also have to be paid.
Money will still have to be spent on maintenance and upkeep.
The repairs might become extensive, since the property is vacant and subject to vandalism.
The neighbors are probably complaining about the eye sore.
The Department of Building and Safety might have become involved.
This can all add up to the seller having to spend a sizable chunk of cash every month, which can also represent a sizable headache for the seller.
You guessed it.
The seller is probably very motivated! Stay tuned.
In the upcoming "Part 2", I'll discuss ways to find abandoned properties, and how to use Government programs to easily finance your investments.