If you don’t have the money to invest directly in real estate at this time, you can still make a ton of money by taking advantage of some programs out there that are not being widely publicized.
Let me give you one example:
My brother just bought a large house from Fannie Mae. It’s on a corner lot in a good area, and includes a studio that can be rented separately. At the peak of the market, it sold for $335,000. The county currently has it appraised at $181,000. My brother bought it for $80,000 cash. It’s an amazing deal. The rental value is $1,750 a month, or $21,000 a year. It will produce about $5,000 in free cash flow a year.
As I said, my brother bought this property for cash — but it could have been done with just 10% down through Fannie Mae’s HomePath program. That means an $8,000 down payment would have gotten you in. If you then sold the property for just half its former peak value in a few years, you’d be selling it for $167,500. That would be a capital gain of $87,500. More than a 1,000% return!
And that ignores the $5K a year in free cash flow or the few thousand you’d pick up in amortization (the reduction of a loan balance over time) — money you could have applied to closing costs and initial repairs.
