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so i watched few real estate investing videos, to my understanding , so pretty much you find a seller and a buyer and you match make them?
add like %15-%25 of the monthly costs, so the buyer/renter pays the mortage and thats how it goes?
So you are like a middleman not letting know buyer and seller know you are doing this right?
I don't know of any law that says you can't buy a house for cash and then immediately enter into an owner carry sale with another buyer. But any buyer willing to pay the extra expenses to do that is going to be unqualified and probably be constantly late on their payments, and eventually default on the contract. The seller would then have to foreclose, which costs money. Plus, they've lost the opportunity cost on the cash. So I don't know how much they would actually make in the long run.
The only way to make money doing that is to sell the real estate investing videos to people who don't know any better.
Not true its called real estate wholesalers. I am not a wholesaler but I bought a house and before I could close I was offered 8K more then I paid. I just did a double closing never spent a dime of my money and made 8K. I have also bought properties from a wholesaler.
"Buying houses with no money? isn't it illegal to be a middle man?"
How do you get a house to closing with no proof of funds? What if the buyer backs out, then you've just committed fraud by entering into a contract to buy but then trying to get out of the contract. If it were that easy, then everyone would be doing it.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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What's illegal in many states is selling a house you don't own. A typical example is where a developer want to buy a home on a large lot, subdivide, and build a new house on the back part of the lot (flag lot). The seller is typically older, kids gone and ready to downsize, and in an area where vacant land is in short supply. What used to happen is the developer sells the front house, and uses the money as part of the purchase of the whole lot and house.
I bought many homes in my own account, when I was a real estate investment broker for a long, long time. I would tie them up with a $1,000 note, and resell the home to another party at a substantial profit, and have a simultaneous closing for both my purchase and sale. I never put up one dime out of my pocket.
I have optioned property with a personal note or at most $1,000 cash, and sold my option rights at a profit, and let the other party complete the purchase.
Example. An old man owned a 40 acre farm right next to the city limits. On one side a 10 acre piece it looked terrible with an alkali pond, an old house and an old barn. The back side was a sloping 30 acres, adjoining a housing track with utilities to cover this property as a development and 2 streets butted up to this property. $1,000 note and a 60 day closing. Was to get the bad 10 acres released to me at closing when those 10 acres were to be paid off, and owner to carry the balance with right to pay off 5 acres at a time and have released to myself. Traded the bad 10 acres to a couple that wanted 5 or 10 acres cheap. Sold the home to an investor, and the cash from the sale went to pay for the down payment on the farm and to release the 10 acres. Sold the 30 acres to a developer, for $100,000 profit. All closed in less than the 60 days allotted.
I knew a lot of real estate brokers around the county that did similar things, and we all made more money off of our dealing in property than brokerage (though we were all well paid brokers). which is perfectly legal as long as you reveal to all parties we were licensed brokers, and we never took a commission in the transactions. We were just buyers and sellers, who know how to move hard to sell property. We were dealing as private buyers and sellers, not as agents/brokers which is perfectly legal as long as you reveal to all parties we were licensed brokers, and we never participated as agents in those transactions and never took a commission in the transactions.
Some of those transactions involved several properties (called a running exchange) and when there was enough profit in the total group of transactions to pay for one, we went to closing, and we ended up with those free properties so to speak.
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