If your tired of leasing, flipping real estate and you want to get the best of both worlds consider Owner Carry real estate. I have been doing it for the last 10 years and I just look in my bank account for my deposits every month. I do not have any maintenance or even talk to my buyer/tenants. I just received an email that they are ready to buy the home and close it out…Yeah
There are three income sources with the Owner Carry system.
1. You net profit monthly from the Owner carry payment
2. The 10% down you will receive from the sale of your property.
3. Your profit from the sale of the property
Lets look at an example.
Buy a home that is worth $150,000 for $97,500. The payment for the owner carry would be based on the average rent for the area. In this example we will say $1500 a month is the average rent. The $97,500 would also have any rehab that is needed in that number.
Lets look at the approx profit on this example
1. $1500 a month – expenses would be over $1,100 a month net profit if you do not have a mortgage,
If you do have a mortgage your payment at 8% which is extremely high would be $965 a month with property taxes included. You buyer would have to pay for the insurance on the home. The other cost would be the note servicing and that cost $25-$35 a month.
Your approx net profit without a payment is over $1100 a month and with a mortgage payment even at 8% would be over $500+ a month.
2. The buyer/tenant would have to put down 10% of the purchase price which in this example would be $15,000. $150,000 x 10%. That money would go directly to you
3. You would have equity left in the note $150,000-$97,500 of $52,500-$15,000(10% down). That would leave $37,500 left of the profit on your owner carry note.
So you would have the $1100+ or $500+ (with a mortgage at 8%), $15,000 from the 10% down you would be getting from the buyer/tenant, and you would still have the $37,500 left from the $52,500 profit your made on selling the home on owner carry. Add that all up and that creates wealth.
The key is getting the right type of property. Properties in tough areas do not always work for this. You need areas that do not have a lot of inventory and are in nicer areas.
This is a great way to make money both ways with real estate and we have all the services that you need to set these types of homes up. Cleveland metro has areas where there are great properties and professionals that want the owner carry properties. Call Brett for more details 216-703-5740 Century 21 Premiere and 602-363-6551 EXP Realty