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Mastering Real Estate Deals: Uncover the Secrets of Multi-Strategy Investing

Good morning, everyone! Welcome back to episode 5 of “Grant Teaches You Something.” Today, we’ll cover an essential topic for any real estate investor: dealing with complicated investment deals using multiple strategies.

So let’s dive right in—today’s lesson focuses on a deal that turned into a $110,000 profit. We’ll break down how this multi-strategy approach, including subject-to financing, renewing and extending loans, and the two LLC system, turned a seemingly bad deal into a win.

How to Handle Complex Real Estate Deals

Understand the Basics

When you get a lead, you must scrutinize it from every possible angle. The key is to know various investment strategies so you’re prepared for different types of deals. In today’s example, our lead seemed like a dud at first. The homeowner owed $460,000 on a house worth $450,000.

However, we didn’t just toss it aside. With deep knowledge and creative thinking, we transformed this lead into a lucrative deal.

Networking: Your Secret Weapon

I can’t stress enough the power of networking. The deal in question came from a connection at a local REI club. Always attend these meetups, strike conversations, and be open to seemingly random opportunities. You never know where your next big deal might come from.

Dig Deeper: The Two LLC System

In this scenario, we implemented the two LLC system:

  1. Mortgage LLC – for handling the mortgage responsibilities.
  2. House LLC – for acquiring and managing the property itself.

This setup offers asset protection and makes complex deals easier to manage.

Strategic Approach to Liens and Loans

The homeowner had two liens:

  • A first lien of $300,000
  • A second lien of $160,000, with $75,000 in arrears

Here’s where things get interesting. The homeowner was current on the first lien but behind on the second. By buying out the first lien and keeping its priority intact through a renewal and extension strategy, we managed to outmaneuver the second lien holder.

Subject-To: A Powerful Tool

We bought the house using a subject-to strategy for the second lien and executed a proper assumption for the first lien. This means:

  • The first lien was assumed and transferred into the new LLC, avoiding it from hitting the homeowner’s credit in case of foreclosure.
  • The house was transferred into an LLC we controlled, ensuring bill payments continued but now under a new name and new management.

Final Takeaway: The Details Matter

Executing this kind of deal wasn’t simple. We had to consult lawyers extensively and make sure all paperwork was spot on. It took months to finalize, but the result was an impressive profit of $110,000.

Building Your Playbook

The key lesson here is not to dismiss seemingly unattractive deals too quickly. By understanding and employing multiple strategies—networking, using a two LLC system, leveraging subject-to financing, and more—you can find gold where others see only rocks.

Networking Pays Off

In this scenario, going to an REI club provided a valuable lead. Always be open to such opportunities and cultivate relationships with other investors. Most of my successful deals come from this network.

It’s crucial to consult with legal experts at every stage. Each step we took was vetted by multiple attorneys to ensure compliance and protect all parties involved. Never cut corners when legal matters are at stake.

Summary

In conclusion, mastering the art of complex real estate deals requires a blend of deep knowledge, strategic networking, and meticulous attention to legal details. The case we explored today demonstrates how creative thinking and multiple strategies can turn a seemingly unprofitable lead into a substantial gain. 

Remember, the key to success lies in not dismissing any opportunity prematurely, continually expanding your network, and always seeking professional legal guidance. By building your playbook with these strategies, you too can uncover profitable deals where others see none. Stay tuned for more insights in our next episode of “Grant Teaches You Something.”

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