To solve the biggest risks and challenges investors have been facing since the subprime market meltdown in the fall of 2007, I started developing, systemizing and sharing The Ultimate Strategy for buying and selling houses at the end of that year.

Prior to that I had taught this strategy as ONE way to make money. After the market panic and collapse in 2008 it has become THE way to make money…

What is the “ultimate” real estate investing strategy?

The Ultimate Strategy is a real estate investing model for…

• Buying and holding great single family homes in nice areas…
• With positive monthly cash flows…
• Better than no money down…
• Without dealing with banks…  and
• Getting them 100% debt free as quickly as possible

It allows you collect cash now, cash flow and cash later on…

• Any type of property
• In any price range
• In any housing market
• During any economic climate

It also helps you avoid or overcome…

• New foreclosure laws
• Seasoning rules
• Restrictive lending guidelines
• Negative cash flow
• Declines in home values
• Investing your own capital
• Using your own credit

Why specialize in single family homes?

Regardless of what’s happening in the economy, everyone needs a home. So you always have a never-ending market of homebuyers and tenants. Likewise, there’s always a parade of single family homeowners looking to sell, for countless reasons, whether good and bad.

Single family homes are the easiest properties to rent, sell, valuate and refinance

The Ultimate Strategy allows you to make money on any type of real estate including income units, commercial, mobiles and vacant land. However I recommend you target and specialize in single family homes because of the easy learning curve and extra benefits you can enjoy.

Why buy and hold, especially today?

In most cases, the longer you hold a property the more money you can make. Real estate wealth is created over time through equity build up. You can capture equity buying at a discount, which most investors rely on. But…

To build equity you must own and hold appreciating investments

The alternative to holding is flipping. Many investors focus on flipping properties, quickly getting in and out. The Ultimate Strategy allows you to flip deals, but flipping every deal is a job. Once the property is sold it’s off to the next deal for another paycheck.

Investors will flip deals for a quick $5,000 to $20,000 profit. But the minimum profit target on deals using The Ultimate Strategy is $5,000 to $10,000 each year held.

With an average profit of $7,000 per year for 9 years, that’s about $63,000 per deal… and that’s net of all buying, holding and selling expenses.

Buying and holding is more profitable than flipping PLUS you can construct offers that get you cash upfront on the day you buy, reliable monthly cash flow each month and big backend paydays for securing your financial future.

Can you rely on appreciation during uncertain economic times?

No. Every deal you do must be bought right.

That means you need to get a great price or great terms. Your competitors are always trying to get the best price, but such a narrow focus misses the vast opportunities for getting great terms instead.

Chances are you will be operating in housing markets that offer no immediate potential for appreciation since the nationwide financial crisis that began in 2007 will likely last a decade. That means prices could decline further, remain flat or only experience modest appreciation.

So where’s the opportunity today?

The Ultimate Strategy allows you to build equity and wealth using “forced appreciation” through rapid debt reduction strategies. And since it’s a long-term buy and hold approach you can “hold out” for market appreciation by structuring deals that last 7, 10 or even 20 years.

The longer you plan on holding a property, the more protection you get from changes in real estate values. In fact, offers made using The Ultimate Strategy are more tied to current cash flow than current market value.

With enough cash flow and rapid principal reduction locked in for many years, you can actually offer a seller a purchase price higher than any other buyer, whether another investor or owner occupant.

Most sellers are unwilling to accept a sales price that makes sense for savvy real estate investors, but you can capture those deals using The Ultimate Strategy deal structuring strategies to push your offer price higher and still lock-in a substantial target profit.

How do you buy better than no money down?

Buying better than no money down using The Ultimate Strategy means collecting all the cash you need to find, buy, fix up and occupy a property… and collecting all this cash on the day you buy.

It also means collecting the extra cash you need to survive and thrive without relying on flipping deals, holding a job or operating another business. Need an extra $5,000… $10,000… or $30,000 in cash this month? Buy a house using The Ultimate Strategy!

Therefore, this investing model focuses on properties with lots of equity and then using the equity to fund the deal. Whether a seller accepts a deeply discounted cash offer or a much higher one by financing their equity, each deal is self-funding — without new bank loans, using your credit or investing your own capital.

How do you FIND sellers with lots of equity?

The Ultimate Strategy marketing tools and campaigns are specifically designed to get sellers with lots of equity calling you, especially owners of free and clear houses.

It may seem like most sellers today have little or no equity… but that is not true

According to the 2009 US Census American Home Survey, 58% of all owner occupant properties have less than 40% loan to value (LTV) mortgage debt — including the 32% which completely free and clear. This is a surprise to most investors.

That means about one-third of all owner occupied properties are 100% debt free and over half of all homes in the US are qualified candidates for The Ultimate Strategy investing model. And yet very few investors target this market. That spells little or no competition.

The 2009 US Census American Home Survey also offers other insights on who to target and how to find these deals:

• 50% of free and clear homeowners are 65 years or older
• Homeowners 65 and older own 90% of all high equity homes
• Newer homes only account for 3% of high equity deals

It’s easy to target the best propects and get them calling you with the proven postcard marketing campaigns I’ve created.

How do you FUND these deals without banks?

Your offers to high equity sellers have four components that when added up will determine your offer price:

1. Debt relief
2. Cash now
3. Cash flow
4. Cash later

Debit relief is existing financing you take over “subject to”

One way to fund your purchase price is take over the monthly payments on an exiting mortgage if the home is not free and clear.

Typically you need a good amount of equity to buy subject to so you can raise cash needed on the deal (buy cost, hold costs, etc.) from a private lender. Otherwise it may be a non-deal — unless of course you apply the strategies of the 5×5 Profit System.

The less a seller owes, the more you can offer. Free and clear properties are ideal.

When you instead offer the seller enough cash down to pay off their existing loans at closing, this is not considered debt relief but cash now…

Cash now is the money the seller gets at closing

This could be an all cash offer (at a deeply discounted purchase price), some cash as a down payment, or no cash down when a seller is more interested in a higher price.

Cash now to the seller comes from private money loans. Currently I will borrow up to 75% loan to value from private lenders, always leaving at least a 25% cushion of equity to protect them. Some of this cash must be earmarked for buying expenses, holding costs, repair money and reimbursement of your upfront expenses like marketing money to find the deal. Therefore it would be rare to offer a seller more than 60 or 70 cents on the dollar for an all cash offer.

The less cash the seller needs at closing, the more you can offer.

Cash flow is monthly payments to seller on a note

A key to making offers using The Ultimate Strategy is structuring and negotiating many years of interest free seller financing. This is made much easier with my deal structuring software. In fact I believe  it’s a must, as even I wouldn’t create offers without using it.

You can offer a seller interest if needed, but you’d have to reduce your offer by the added cost of this interest, making it harder to get your price accepted. But you’ll soon discover that many sellers are more interested in getting top dollar (and the many other benefits you can offer by buying their house) than interest.

When a seller takes back a note with 0% you get pure principal reduction on any payments you make. Where does this money come from? It comes from the income you get from your occupant — whether it’s a tenant, tenant-buyer or contract buyer.

The less cash the seller needs each month, the more you can offer. In fact, sellers will accept no monthly payments to get a higher price. Amazing but true.

Cash later is a lump sum balloon payment to the seller

Money to pay off balloon payments typically come from selling or refinancing the property by the end of the note term. You can pay off the note early but you’d want to negotiate a discount. What if they won’t take a discount?

Every seller carryback note you get using The Ultimate Strategy must contain a “substitution of collateral” clause. This gives you the right to move the mortgage onto to other properties during the entire term of the note, allowing you to sell or refinance the property without paying off the seller early. Without it, you cannot offer the seller top price as doing so assumes you’ll benefit from interest free financing for the entire term of the note… benefits like many years of rapid principal reduction or positive cash flow.

The longer a seller can wait for their money, the more you can offer.

How to become a “high equity specialist”

Get the support, tools and instruction you need for starting and operating a true business as a real estate entrepreneur by ordering the Free & Clear Cash Machine. It’s your step-by-step training and a comprehensive system for applying The Ultimate Strategy. It includes everything you need to start doing these awesome deals.

Recent changes in U.S. housing markets and lending industry have created new challenges for real estate investors. But it also creates incredible huge opportunities if you’re willing to make a few adjustments in the type of deals you go after. How you buy and how you sell should be dictated on what’s happening in the market TODAY… not last year or in years gone by.

Let’s look at the proven methods for collecting big checks as a real estate entrepreneur and how targeting sellers who have higher equity can get you more cash now, cash flow each month… and cash later.

Retailing

Retailing in creative real estate is usually based on buying a junker house, fixing it up real nice and then selling it to a qualified cash buyer. In a normal or hot market you can compete with other houses in the same price range because you’re offering a totally remodeled, pristine property.

A rehabber is typically under time pressure to pay off an underlying hard money or investor loan and may not be in a position to offer owner financing. Changes occurring now in the traditional mortgage markets can make relying on a ‘cash out’ buyer more of a challenge.

There are several solutions to this.

First, if you’re in buyer’s market (with some of your competition leaving the game) you can now buy better negotiating lower purchase prices. In turn, you can offer your newly remodeled house at a more attractive price… making it easier to find a buyer.

Next, begin financing your rehab projects with private investors. You can get lower interest rates and a longer repayment term. Then you have the option of selling the property to a tenant buyer or to a contract buyer using wraparound owner financing.

More and more buyers need help financing and by offering the solution you can get a higher price and seller faster.

Finally consider targeting sellers with free and clear houses by offering a very attractive price in exchange for no interest or low interest, long term owner financing. This is easy to do as getting a list of houses with high equity can many times be acquired through public tax and land records.

These sellers must compete in the marketplace just like any other seller. In fact, according to the most recent U.S. census data 1 out of every 3 houses in the nation is free and clear!

Using a small, well-secured private investor first loan you can raise all the cash you need on these deals. Give the seller a down payment if needed, recapture your buy and hold costs, do repairs, pay off existing liens and even put an extra $10,000 or $25,000 in you bank account… on the day you buy.

Download the complete article to continue reading: Collect More Cash Now

by Richard Roop

Attracting more money into your life is easy when it’s purpose driven. Why work at making more money unless you know exactly what you’ll do with it?

Making money is always a trade off because it takes your time and attention away from other things that are important to you. That’s fine if the extra money helps you pursue and achieve your highest priorities.

So the first question is “What are you going to do with more money?”

The clearer you are on this, the easier it is to attract all the money you want or need.

1) The purpose of money is… to do what you want

Do you need more time freedom? What are you going to do with more time? You can always get more money — but no one gets more than 24 hours in a day.

More money gives you new choices how you spend your time.

If money was no object, how would you spend your week or your month? What does your perfect day look like? These are questions that only you can answer.

If you could do anything you wanted, what would you do? Sometimes you need more free time to do what you want. Sometimes you need more money to free up that time.

2) The purpose of money is … to free up your time

You could make your own clothes, build your own house or grow your food. But that would take a lot of your time.

Instead, most of us invest our time making money so we can simply buy what we want.

For example, entrepreneurs invest marketing dollars to attract new customers. Knocking on a hundred doors or calling a hundred numbers takes more time than buying an ad read by thousands of people.

Spending money on systems, investing in tools or hiring help frees up your time. I don’t want to do my taxes, but I want them done. I don’t want to take all my calls, but I want them answered. If I ever decided to cut my own lawn, I want a riding mower — turbo-charged.

3) The purpose of money is… to have what you want

What do you want to have or own?

Everyone needs a home. Do you need a better home? Would you like to live in a better neighborhood? Would you like to live closer to where you work or play? Wouldn’t anyone want a home that allows you to live with more comfort and convenience?

Everyone needs to get around. You can save money traveling across the country by bus to visit friends and family. Or you can save time flying in style — if you have the money.

Even though it’s encouraged by our society, the habit of buying what we want without having the money first puts our freedom as risk. The danger here (which far too many people have experienced) is becoming enslaved by debt.

The smartest use of borrowing would to invest in services, people or things that generate more income and profits. Borrowed funds can also used to save you time, allowing you to then reinvest that time making money — more than you originally borrowed.

Consumer debt comes from using credit to buy things you do not need. Or from borrowing money without a profitable payoff. Debt can be used to consume or to produce. Avoid consumer debt. If you’re carrying any of it now, set a goal and make a plan to rid yourself of it — as quickly as possible.

Do you want a new computer? I use computers for both business and entertainment. Use your money to buy anything you want — but you don’t need a computer to play. So don’t buy one just for fun until you have extra money not earmarked for something more important.

On the other hand, I need a computer for making my business more efficient and profitable. It’s a great tool for increasing productivity and saving time. I’ll pay extra for a top-notch operating system, high-speed internet connection and the best software. I can even justify borrowing the money to buy it since it’s an investment.

4) The purpose of money is… to be spent

Saving for a rainy day is good. Putting money aside for taking a family vacation is fine. But what good would $10 million in the bank be if you were not allowed to spend it?

Money can do a lot of positive things when used wisely. It can cloth the poor and feed the hungry. You could volunteer your time teaching life enhancing skills if you didn’t spend all your waking hours chasing after more money.

Accumulating money is fine — as long as you plan to spend it at some point.

Giving is great and just another type of spending. Money should flow. It does no good unless used. So use it to take care of yourself, and your loved ones. Avoid being a burden to society first. Then become a pillar of society.

5) The purpose of money is… to live your preferred lifestyle

Money allows you to pay off consumer debt, invest in a business or quit a dead-end job. It allows you to spend your time doing whatever you want. It allows you to give back or make a difference. What you want is totally up to you.

And it’s not money you want. It’s what it can do for you.

So know what you want. Blueprint your ideal life. Everyone deserves more then they settle for. Dream bigger — and use your time and energy pursuing those dreams.

What would your life be like if “money was no object”? What would you become? What would you have? What would you do each day?

Answering these reflective questions is a key step to living out your dreams.

Don’t be concerned with the “how” yet. Start with the “what” and the “how” will reveal it itself. Collecting $50,000 in cash in 90 days is real specific. That’s an outcome. How you achieve it is more flexible because there are an infinite number of ways to do it.

6) How to Make MORE Money

Most people are employed to do work. They make a living by earning a wage, providing service to a company. They trade their time for a steady paycheck. The way to make more money at a job is to work more hours or increase your hourly pay.

Professionals make money offering needed products and services. They make more by selling and delivering more. They can also earn more by reducing costs or charging higher prices.

Entrepreneurs promote a business of their own. The purpose of any business is to generate profits through the sale of goods or services. The more value a business can provide to the marketplace, the more profits it can produce for its owners.

The entrepreneur is the leader of the company but also performs all the work not handled by systems, staff and contractors. Entrepreneurs can make more money by hiring additional help, increasing their promotional activities and automating as much of the operation as possible.

They can also make more by offering products and services with higher profit margins.

Investors or speculators make money getting a return on their capital. They invest money to own assets which appreciate in value or produce income. Money can be made from the equity in a business, real property or various commodities.

“Real estate entrepreneurs” make money operating a business that involves buying, selling and financing real estate. They earn money solving problems for buyers, sellers, tenants and investors. And there’s plenty of demand for this type of help with today’s economic climate and continuing credit crisis.

Real estate entrepreneurs can make more money today cherry picking only the very best deals and avoiding unnecessary risks. They don’t invest capital for a return on investment. Instead they leverage themselves investing in marketing, tools, people and systems that help grow the business and increase the income.

7) How to Become a Real Estate Entrepreneur

Click here for training, support and resources from me and my team.

1. Set a goal
2. Make a plan
3. Plan your work
4. Work your plan
5. Make adjustments along the way

This is the exact formula for getting great results and uncommon profits used in the Free & Clear Cash Machine, our Million Dollar Coaching program and The Experiment.

Google just alerted about this video…

To expand a bit…

1. Set a goal

Get extremely specific on exactly what you want to have, do or be. Set a deadline. Only create goals that are important to you, excite you and that you’re committed to.

2. Make a plan

What actions need to happen and in what order? What are the critical action steps? Break your goal down into manageable pieces that need to be completed.

3. Plan your work

Put all the tasks into your daily, weekly and monthly schedule, blocking out dedicated time for completing the action steps. Is there anything you can assign or delegate? Add some slack time too.

4. Work your plan

Now that you know what you want, what has to happen, and when it will be done, “don’t think during the week”. Just execute.

5. Make adjustments along the way

You’ll typically be off course much of the time. Track your progress accept the feedback you get. Change whatever you must to ensure you achieve your goal.

For related help, I can highly recommend The Secret of Creating Your Future.

Join The Experiment and let us help you achieve an ambitious 90 day goal for increasing your income.

Comments (moderated) are welcome below!

Creative Real Estate Investor’s Bailout Plan

By Richard Roop

Part 2 of 2
(December 2008)

(go to Part 1 here)

I’m announcing my semi-retirement.

In November of 2012 I could be elected president.

My campaign platform would be on solutions for housing, credit, energy and personal evolution. This means I have about a little more time to buy and sell hundreds of more houses as a creative real estate entrepreneur.

Becoming totally financially independent, comfortable living off my real estate investments, would allow me to offer my public service without a salary.

What would I do with the power from this office?

First, I will abolish the IRS and move to a national sales tax. Income will not be taxed, only spending. Therefore the more you save and invest, the more taxes you’ll be able to avoid allowing you to keep more of the money you earn. No longer will you work 4 months out of the year to pay Uncle Sam.

The Federal Reserve (in reality a private corporation) will be fired and abandoned. They will no longer print U.S. currency and loan it to our nation with interest. They will no longer control interest rates, leaving that to the free markets. Gold, real estate and other real assets will back our currency instead of just debt backed by “the good faith of the United States.”

Consumer debt and unnecessary spending will not be encouraged or rewarded. Purchases will most often be made in full or through barter and trade. The government will not tax most of these transactions. Instead we’ll create new tax relief incentives to anyone increasing their financial reserves, building their retirement account or investing in their local community.

Troubled corporations offering products and services no one wants will be allowed to go out of business. Our role will not be to employ people or keep them employed. In fact most federal workers will become independent contractors and entrepreneurs who will use technology to telecommute and work from home, then employing other professionals to help them be productive, efficient and self-reliant.

Congress will be closed down. The Electoral College will end. Lobbyists will no longer have a job. Politicians will need to retire, get a job or start a business. Lawmaking will be reduced in favor of eliminating useless laws and enforcing the good ones. National issues and government policies will be debated on the internet and decided by popular vote using public online surveys and ballots.

Our involvement in all foreign wars over global power and oil will be ended. The trillions of dollars saved will be used for national defense, developing free energy technology and paying off the national debt. We will no longer borrow to spend but actually have a balanced budget.

All media will be interactive becoming a source for education, involvement, community and enlightenment funded by subscribers, not advertising. An end to media hype, tabloid news and propaganda will make room for inspiring stories and useful guidance for living a more prosperous and purpose-driven life.

The public will spend most of their time being productive, creating value to the free market, enjoying their families and improving their emotional and physical health. People and communities will come together and stop relying on federal handouts. We will work together as a nation to increase the quality of life reaching out to every corner of the country.

Speculation, greed and corruption will be replaced by sound investment, productivity and innovation.

Building a Stronger Nation with Creative Real Estate

Instead of buying bad debts and loaning money we don’t have to bankrupt corporations, we will buy and invest in single family houses… since everyone needs a home. We won’t fund these purchases with taxpayer money. Instead we will take over the payments on existing mortgages and have sellers carry back their home equity in a note.

On deals where the seller (or the deal) needs cash, we will raise these funds from private investors. These investors will be secured by equity in our properties and be paid an attractive interest rate until the property is sold or refinanced.

Sellers will benefit as we cut out the middle men. We can offer a higher purchase price when the equity in the deal isn’t being whittled away by fees from real estate agents, banks and mortgage brokers.

The money saved buying in this way can allow us to buy at a discount and still offer a seller a fair and acceptable price, many times getting them what they might net selling conventionally, but without the hassle and uncertainty.

The difference between our discounted purchase price and our eventual resale price becomes a profit spread. When this spread is large enough, we will take out part of our future profits in cash, upfront.

From a cash needs basis, this will allow us hold longer-term and avoid having to do discounted flips for cash. But we will only borrow against our profit when the projected income on the house will cover the underlying debt and expenses.

If we cannot pull cash out when buying then we must only take over existing mortgage payments or create seller carryback financing terms that would allow the property to generate a positive cash each month.

When paying all cash we need a bigger discount. To protect our private investors we will not borrow more than 75% of the property’s value. Those funds will be used to buy, fix and occupy the property, with any cash left being available for the seller. Even in this case, the underlying payment for taxes, insurance and interest must be supported by the income from the property, leaving enough left over to create a positive income. Without a positive or breakeven cash flow, there’s no compelling reason to own these houses.

We will invest these properties, using none of our own cash or credit. The profits from these real estate transactions will be used to fund the buying and selling operations, generate cash to payoff our unsecured debts and provide reliable influxes of cash to survive and thrive.

Buying discounted real estate and holding for 6 years or more using a purchase price based on today’s value (or based on a projected lower value in some housing markets) will keep us well- protected. Every deal will improve our balance sheet but must also provide either cash now or cash flow. Otherwise we can’t justify investing in the property… and the seller will need to pursue more conventional avenues for finding a buyer.

Even though we are in a position to hold these houses for many years, we will immediately offer to sell them with flexible owner financing.

Some buyers will fix up our properties in exchange for equity. Some will get new bank loans and cash us out. But most will be attracted by our offer to finance them whenever they can’t (or prefer not to) rely on a new bank loan.

We will create wraparound financing for buyers with 10% to 20% for a down payment, or rent the home to them until they close with a 3 to 5% down as non-refundable purchase deposit. Being a creative and flexible seller allows us to sell for top dollar quickly.

Anyone who’s not looking to own will have to rent. Each property we buy can simply be rented since we’re not under time pressure or a cash crunch to sell. We’ll be in the business of providing wonderful housing opportunities to everyone.

Banks? We don’t need no stinking banks!

Ok. Ok. Have I lost my mind? Can I really accomplish these goals? Do I really want to be president? Well of course most of this is all fantasy… but not all of it!

I would only become president it became a non-political position. I hate politics, whether corporate or government. But…

What I described above about buying and selling houses is not science fiction!

In fact, it’s exactly how YOU can prosper and profit during an uncertain or depressed economy. YOU can buy houses using this “ultimate game plan.” YOU can help buyers finance or rent a home. And YOU can help investors get secured returns on their idle cash or retirement funds.

As a result, over the next few years, taking advantage of these historic market conditions… you can make a fortune as a real estate entrepreneur… and retire with me in 2012.

How can you implement all these real estate investing ideas?

Check out the Free & Clear Cash Machine. It holds all the answers. You certainly need it for investing safely and profitably after the recent housing bubble burst and credit crisis.

I guess I need a running mate… “Hey, get The Donald on the phone!”

(go to Part 1 here)