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M O R E    R E S O U R C E S

Article by Jeff Beaubien

Quickly add $20,000 or more to your balance sheet

This is such a fast and easy way to add $20,000 to your balance sheet, I'm surprised it's not being done by every free person in this great country of ours. Since you're probably skeptical, I am going to use a real-world example of how I accomplished this recently.

Note: This technique requires that you be pre-qualified for a mortgage.

I received a phone call from one of my Realtors, Cindy. She told me that an agent in her office had listed a home that morning and that the sellers were about to be foreclosed upon. Within 30 minutes of her phone call, Cindy and I went out to see it.

It wasn't anything fancy, a 3-bedroom, 1-bath ranch with a 2 car attached garage. The sellers were asking $89,000 - about $5,000 less than what the home was actually worth.

I made an offer on the house that looked like this: $85,000 with $1,640 back at close for improvements (that I will actually use to help offset the down payment on the home). The sellers accepted my offer so we arranged for a closing date in three weeks.

While I waited for the closing date to arrive, I ran a classified ad in my local newspaper that read, "Don't Rent. Why Rent? Rent-to-Own! $4,995 down and $995 per month." When the ad came out I had over forty calls on the house.

I couldn't possibly find the time to show the home to all these people on such short notice so I let them drive by and peek in the windows. I got a phone call from a potential tenant/buyer who said that she wanted the house (without even seeing the inside). She agreed to my terms which looked like this: $4,995 down ($4,000 option deposit + $995 for first month's rent), $100 per month rent credit, a sales price of $119,900 and a term of 1 year. I pre qualified her and she was an acceptable risk so we closed the deal.

Remember, when you are offering such a tremendous value, you are entitled to receive a premium price for what you are offering. Since my tenant/buyer was receiving a tremendous value (a fast rate of equity accumulation and a very small down payment to buy a home), she was more than happy to agree to my high sales price. Also remember that there are many different reasons that make potential buyers not qualify for a conventional mortgage which makes a lease purchase deal very appealing to them.

I closed on the purchase of the home and used the $4,995 my tenant/buyer gave me plus the $1,640 to help offset the down payment on the home. I then gave the keys to my new tenant/buyer - deal done.

Let's look at the numbers; I paid $83,360 ($85,000 - $1,640) for the home and my total monthly payments are $845. I am receiving $995/month in rent for a positive monthly cash flow of $150 and I have a written sales agreement to sell the house to my tenant/buyer for $119,900 in 1 year.

And that is how I added over $20,000 to my balance sheet quickly and easily.

UPDATE: My tenant buyer called me recently. She is approved for a mortgage and would now like to close on the purchase of the home - just two months into our agreement. Yes!!!
Jeff Beaubien, is the President and founder of Beaubien Investment Company in Howell, Michigan. He specializes in creative real estate techniques, but focuses on the most powerful technique of them all; the lease purchase contract.
As a result of his success in real estate, Mr. Beaubien is the author of his real estate course, The Lease Purchase Handbook.
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