10/17/2024
E-Lesson #4: The 4 Fundamental Factors for Making Big Money in Real Estate
Welcome to E-Lesson #4! Remember, these e-Lessons are supplemental and are not to be confused with our live Zoom sessions for the “Subject To” Advanced Real Estate Investing/Property Acquisition course.
The Full Course starts on October 19th, 2024, and will run through November 19th, 2024, covering 14 live Zoom sessions. If you're unable to pay for the full course upfront, we offer flexible payment plans. Early sign-ups by October 19th receive a Massive discount, so don't miss out! Contact us today to enroll and get started on your journey to advanced real estate investing via “Subject To.”
The Full Course includes all contracts, agreements, trusts, leases, affidavits, marketing strategies, LLC formation guidance, and more. Personalized coaching and mentoring are also available to support your learning.
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The 4 Fundamental Factors for Making Big Money in Real Estate
Success in real estate investing is all about having a competitive advantage. The most significant advantages come from these four factors:
1. Price – The amount you pay for a property.
2. Terms – How you pay for the property you buy.
3. Urgency – The motivation level of the buyer or seller.
4. Information – Access to critical, strategic information about an opportunity.
Let’s break these down with some simple examples:
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Advantage #1: Price
The most obvious advantage in real estate investing is buying a property at a great price.
For instance, if a piece of land is worth $200,000 and you're able to purchase it for $50,000, you've gained a tremendous advantage right from the start.
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Advantage #2: Terms
When would it be a good deal to pay $250,000 for a property only worth $200,000? You might be inclined to say "never," but that wouldn’t be correct.
Imagine I own a house worth $200,000, but I have an emotional attachment to it and refuse to sell it for less than $250,000. Now, you could be stuck until you come up with a clever solution.
You offer me the following deal: "Eric, I’ll pay your price of $250,000, but here’s how. I'll pay you $700 a month for the next 30 years. When it’s all said and done, I’ll actually have paid you $252,000—which is $2,000 more than you’re asking!"
Why would you agree to this? Here’s why:
While you’re paying $250,000 at zero interest, compare that to paying $200,000 with a traditional 6% mortgage. Over time, with interest, the cost of paying $200,000 at 6% totals $431,676. That’s a massive difference of $181,676!
This demonstrates that terms can often work in your favor and make even an overpriced property a profitable deal.
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Advantage #3: Urgency
In real estate, as in many business dealings, the party who is in a position to walk away from a deal often gets the best terms.
Picture a homeowner facing pre-foreclosure. They desperately want to improve their situation to avoid losing their home, their credit rating, and a lot of dignity. You, on the other hand, are a well-informed investor who knows how to help, but you’re in a position of strength. You don’t need to act—you have options, while the homeowner doesn’t.
This imbalance of urgency is an advantage. The seller is a motivated seller, but you are not a motivated buyer. Always aim to act from a position of strength, leveraging the other party’s urgency to strike favorable deals.
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Advantage #4: Information
This advantage is all about knowing more than the other party.
For example, imagine a homeowner who owns land in a rural area. You’ve just discovered that Walmart is planning to build a Supercenter on the nearby property. This is valuable information that the homeowner may not be aware of, and it gives you a significant advantage when negotiating a deal.
Knowing key information that others don’t is a huge asset in real estate investing.
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How to Use These Advantages to Put Cash in Your Pocket
I don't want to take too much of your time today, so we’ll explore how to use these advantages in detail in the next e-Lesson.
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Coming Tomorrow: E-Lesson #5
In E-Lesson #5, we’ll explore two specific strategies that will allow you to profit from Advantage #1: Price. As part of that lesson, you'll learn why money is a "function" of time and how to assess both together for smarter investments.
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Your Next Step: Get Ready for the Full Course!
The Full Course is packed with everything you need, from essential documents to strategies for success.
Sessions #1-14 will guide you step-by-step through real estate property acquisitions using the "Subject To" method.
Don’t forget—sign up early and pay in full to take advantage of a SIGNIFICANT discount by October 19th, 2024. Flexible payment plans are available for those who cant pay in full.
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I’d Love Your Feedback!
You’ve now received 4 e-Lessons. I would greatly appreciate hearing your thoughts and opinions on how these lessons are helping you so far. Your feedback is invaluable as we continue to improve.
Until tomorrow,
Eric
