Who is THE BEST real estate investor in Georgia? He’s a friend of mine; we met in 1996. Problem is, because he doesn’t want to be anyone’s guru, he has forbidden me from using his name.
With investors like John Adams and Dyches Boddiford in the state, how can I say that my buddy – we’ll call him Mr. Georgia – is the best? Because to him, real estate investing is a hobby, not a job. On top of that, Mr. Georgia’s investment strategy is unique, original, flawless and extremely profitable!
Let me first outline several deal structuring techniques that he uses:
Buying Pre-Foreclosure: When a real estate investor buys a property before it’s sold at the foreclosure auction.
Short Sale: When an investor negotiates with a seller’s lender to get the lender to accept less than what is owed as payment-in-full on the seller’s mortgage.
IRC (Internal Revenue Code) 121: If you’ve lived in your house for two of the past five years, when you sell your house, you get to keep up to $500,000 of the profit ($250,000 for singles) tax free. Better still, the IRS will let you do this every two years!
Here’s Mr. Georgia’s investment strategy:
He works a concentrated area – Alpharetta, Georgia. He looks for houses worth approximately $1.3 million. Normally, the homeowner is behind on payments and is facing foreclosure. In addition, often times, the property is in less-than-perfect condition.
After the homeowner agrees to a Short Sale, Mr. Georgia begins negotiating with the seller’s lender. On average, the lender agrees to accept $700,000 as payment-in-full. Why do lenders agree to this? Because they DO NOT want the house back! Mortgage companies are in the money-loaning business; not the hammer-swinging, home-owning business.
After buying and moving into the property, the rehab begins. This isn’t your typical rehab. Everything – and I mean everything – is done top shelf!
Of course, to stay out of the contractor’s way, Mr. Georgia and family are “forced” to spend time away on vacation.
Close to two years after buying the property, it’s put on the market. Because it’s now a showplace, a buyer is often found quickly. At two years and one day, the property sells for about $1.5 million.
Bottom line: After completing a $300,000 rehab and selling the property, Mr. Georgia is able to pocket $500,000 TAX FREE from this deal! Can you say, “Let’s do it again!”?
And it gets even better: He also owns 17 paid-for, single-family rental homes that average $1,100/month in rent. To avoid any tenant headaches, Mr. Georgia’s rentals are managed by a property management company.
Do I think that this is a wise way to invest in real estate? I just tried to talk Kim into putting our horse ranch up for sale!
Do you seek real-world real estate investing information? Go to BillandKimCook.com. It’s packed with free creative deal structuring techniques and strategies. Bill and Kim Cook have been investing in real estate since 1995. Their portfolio consists of single-family rentals, a small mobile home park, plus notes and options. If you have questions, give Bill a call at 770-815-8727.
