How To Get Someone To Buy A House For You
What a nice thought. Could it be?
Absolutely, this is really what real estate investing is all about. Getting others to buy property for you. It happens all the time. I call it…
The Equity Play
You buy a house where the rent you collect covers the mortgage payments and expenses.
Pros: Someone not only pays all your expenses but takes care of the place and makes a number of repairs for the cost of materials only.
Cons: In it’s pure form…it takes 30 years. The time it takes to pay off the mortgage. Not that many people do that, though. Most will hold until the profit can move you into a larger property or multiple properties. Also there’s the down payment needed.
The biggest ace in the hole and how you can really make The Equity Play pay, is Appreciation. Just because we are not enjoying property appreciation now, doesn’t mean we can’t talk about it. When markets start moving again you’ll be in place and ready.
In the Equity Play, if you buy a house for $200,000 and someone else (the tenant) pays the payments and expenses for 10 years, and if it appreciated at a compounded 4% a year (historic average), that would about double the value of your house. Not quite, but close. Now you’ve got some real Equity.
The Equity Play is long-term. At least 10 years. Because real estate markets are cyclical, you have to ride out the lows. If, for instance, you bought now, it might take a few years before you start seeing some appreciation, in the meantime you are on the pure form and just letting someone buy a house for you.
It’s not a bad plan.
Previous post, See: There are only 3 reasons to buy real estate in Bellingham or Anywhere Else.
Next: Cashflow – Think Of It As The Job You Don’t Have To Go To.