No down financing Use your body to get zero down financing how to buy with no down payment!

Use your body. Invest in real estate!

Those of you who know me also know I am a fan of commercial real estate. It is a sophisticated investment tool with a more stable tenant base. However, commercial investments are cut-throat. If you don’t know what you are doing you are likely to get a hair cut the hard way.

"It could cost you everything you own and everything were going to own for a long time"

Residential real estate investments are a great way to get a start in the real estate biz. The investment dollars are usually much smaller. If you make a mistake you are going to pay. However, you should be able to work out of the problem in time. If you make a mistake in a commercial deal it could cost you everything you own and everything were going to own for a long time.  Why not get rich instead?

430 So. Sheridan, Denver, CO.

The biggest reason to start with residential properties is the financing. A single family house or a duplex is an easy way for a guy who has almost nothing to get a great start in the real estate investment world. The easiest way to buy residential is buy your own home.

Sound boring? Maybe it is time to spend more time on research, like reading my blog, and less time on the get-rich-quick seminars.

For most real estate investors the best way to real estate riches is the slow route. This is get-rich the old fashioned American way, through smart use of your capital and plenty of hard work. Forget spending an hour a week and retiring a rich guy one month later. Almost no one can do it.

"Most of them will still be waiting as you get ready to retire"

The rare big hit happens in real estate once in awhile. It happens in real estate dreams more often. The ‘big hit’ guys tell you what happened after they got lucky, but they don’t tell you how long it took to find the miracle deal. Nor can they attest to the thousands of ‘big hit’ people who are still waiting for the real estate genie to come down from the sky and wave the magic wand of instant wealth. Most of them will still be waiting as you get ready to retire.  Be sure to wave 'Hello" as you go by!

4200 West Ohio Place, Denver, Co.

I like the tortoise way to real estate riches. Let’s do one property. If we ge the formula right we do another. Usually, it takes plenty of tweaking and some on-the-job lessons to get it right. However, over time, your estate will build and you  can smile at the guy sitting on the bench dreaming about his get-rich-quick real estate schemes.

"Owner occupants get better
financing deals"

If you are not a dreamer real estate investing is probably not for you. Turning an ugly duckling into a rich prince takes vision. It also takes persistence.  At some point we leave the dream on the table and roll up our sleeves. We can always come back to the dream later. Let's get started!

Use your body. Invest in real estate.

That is another way of saying, owner occupants get better financing deals. Most banks want 20% to 25% down when financing real estate investments, if you can find a bank willing to lend at all. A home buyer, though, can usually get in with the slightest down-payment, and sometimes nothing down at all!

If you are going to stay in front of the law instead of running from it, you have to do what you say you are going to do.  If you represent you are going to live in the property you better do exactly that. Otherwise, you may be talking to an investigator with the Mortgage Fraud Task Force and hiring my law firm to defend you!

I know a lot of people who have invested in single family homes who are very wealthy today.  You don't have to make the jump to commercial to become a real estate millionaire!  If real estate investments are the path to financial independence then getting started in residential is a good way to go.  You can decide where to go after that!

14720  E  43rd Avenue, Denver, CO

Stay tuned! Learn how to choose your first property.  What is the best kind of financing to have and why?  What sorts of renovations make sense and what are a waste of money?  Tax benefits and problems with real property investments and how to make the jump to commercial real estate.  Follow the advice of experienced real estate investors and get your start to real estate to riches!

Properties pulled from RE Colorado search 2/26/2010.  The ask price on all of the properties is less than $100K, some a lot less.  All properties have at least two baths, are under 2,000 square feet and need something.  One has special renovation money available, and special financing.  Whether they would make a good investment depends upon the condition, the location, the price, the financing and a host of other factors.

Tim Paynter purchased his first investment property when he was 19 years old.  He obtained his real estate license at the same age, and paid for his college education through real estate sales.  Since then, he has been involved in residential and commercial real estate sales, residential and commercial sales and leasing, residential and commercial investing, hard money financing, property renovation and other techniques to wealth building through real estate investments.  He obtained his J.D. in law in 1991 and frequently advises young real estate investors.

How to increase the value on a 10 unit apartment from $400K to $1.5M

10 Unit Apartment -

Buy for $400,000     
Sell for $1,500,000!

Do you want to make a property go up in value quick? Experienced investors know the tricks. Find a higher and better use for the property by buying residential and turning it into commercial.

"The strategy is time tested and still a good bet"

An apartment building is valued based upon it’s rental income. The higher the income the more the value. Obvious.

The better question is, how do you increase rents so you have a more valuable investment?

The traditional Robert Allen, ‘Nothing Down’ strategy is to buy a fixer-upper, put in the least you can, usually at least paint and carpet, and flip it for big bucks. The strategy is time tested and still a good bet in today’s market. Unfortunately, there are a lot of guys who want to be the next Albert Lowry, make a million in real estate guy. Competition drives up prices, the deals get harder to find.

If you can look at the property with a different profit making strategy perhaps you will see something the last guy who considered the investment missed. What if you increase value by increasing the highest and best use?

"The part you might want to change is how it is used for housing"

For example, what if you find a small complex and change the use altogether? Well almost altogether. The apartment is already built out as housing. Let’s leave that part the same.

The part you might want to change is how it is used for housing. Instead of renting the apartments to long term residents, why not rent them to short term travelers and those tenants who are in transition between homes?

For example, let’s take a small apartment complex that has a poor location. The city has grown up around it, highways have been built nearby and it is likely located on a busy street. You can buy the dump for a song because no one wants to rent there. Newer properties in quieter neighborhoods are more attractive to raising families.  Your tenant base consists of poor people who frequently can't pay their rent and move from one apartment to the next every few months.

Perhaps you pay top buck, 10X gross rents. Because the rents are low, top buck isn’t so bad!

Now go in with your renovator’s hat. This property will likely need a complete makeover in order to suit the new use.  You are going to spend a pretty penny, all with the idea of making a pretty dime. When you are finished you will have new countertops, probably cupboards, new carpet, tile floors anywhere you can stick them, new sinks in the bathrooms and maybe even a modern looking exterior. Of course, you will install wireless internet along with a "business center" and put in a modern hot tub with landscaping.  Business travelers love to soak between jaunts.

"The busy street turns into an asset"

Now stick out your for rent sign. Instead of asking $400 a month for a dingy one bedroom you ask $50.00 a day plus tax from a higher end clientele. The minimum stay is 5 days.  That is $250 for one week, more than half of the rent the old tenant base paid over an an entire month! 

Your new market is the transitional tenant who is between houses or who is here for a few months on business.  The busy street turns into an asset. You are easier to find and your “guests” can find their way around a strange city starting from a well known boulevard.  

Your slum property has turned out to be a cash flow machine! Instead of getting $400 a month per unit you now get $1,500.00. The last landlord barely made his payment with $4,000 scheduled income.  Now you get $15,000 scheduled income! 

That is plenty of dough to pay the extra costs of maintenance. You now have to clean units at least every two weeks instead of once every three months, since the occupancy time with the last class of tenants, mostly after evictions, was about three months. There is not as much work to do when the units flip, though.  First, you have a clientele that takes better care of your units. Second, the units are in renovated shape to start with.

"A 10 unit complex that was worth $400,000

is now worth about $1,500,000.00"

To be sure, the strategy can take a good nest egg to get off to a good start. There may be zoning issues to tend with, although if most of your units are leased to “extended stay” tenants over 30 days there is not much most cities can do.

There is a lot more management involved. Someone has to answer the phone, show the units, book the clients, schedule cleaning.  However, considering you have increased cash flow by 300% the strategy may be well worth it.

Put the pencil to the paper. A 10 unit complex that was worth $400,000 is now worth about $1,500,000.00. If it takes you a year to get it done you have made a pretty good profit!  Now do it again except bigger, or find someone who wants cash flow in place, take $500,000 as a down-payment, collect $10,000 a month and get onto your sailboat headed for the caribbean.

This is the strategy for trippling cash flow.  If you want the details and how-to, the legal secrets, buy my  "Guide to making a million bucks changing apartments into extended extended stay rental units."   I will also consult with you one on one for a reasonable fee.