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Article > Pretend You're Skint to Get an Infinite Return on Your Cash

Article kindly provided by John Wilson

www.property-investment-blueprint.com

 

Picture the scene. You've got a super motivated seller who needs to sell their property. You've negotiated a good discount and you've persuaded them to let you take an option on the property.

But there's a problem. There's a good whack of equity in the property. What do you do? If you've got some funds in the bank then it can be very tempting to just pay the seller the full amount of the equity to get them off your back. It's a good deal after all, why not?

When you have none of your own money in a deal, you are by definition getting an infinite return on your money. As soon as you put cash into the deal, you're not. If you put a chunk of cash into the deal, then you're not really being creative any more. You might as well just get a mortgage and buy it the traditional way.

You have limited funds. Unless you're Roman Abramovich, you're not going to be able to do this for every deal. So don't do it for this one!

Pretend you're skint. The only money you have is the money that the incoming tenant buyer will put down. And even then, you'd prefer most of that to be in your bank account, right?

So, what do you do? Sure, your seller would like the full amount of their equity, but do they *need* it? You need to ask probing questions to find out what is the seller's goal in selling their property. What do they need the money for? Are they emigrating to Timbuktu, are they going to buy a houseboat, what? You need to find out what is the minimum amount they need in order to do that. The rest you can pay them in instalments or when your tenant buyer mortgages out.

You can't just steam in there to get this info though; you need to

1) build rapport with your seller and

2) ask their permission to ask them questions about their situation

To give you an example from a recent deal of mine, I established that the seller needed money to take a training course so that he could get back to work on the oil rigs. We agreed that I would pay him what he needed to do that and then he would get the balance at a later date.

So, forget about what you have in the bank. Pretend you're skint and you'll get a great deal every time!

 

John Wilson Property Investment Blueprint

 

John Wilson has been investing in the UK for 10 years and built and sold a successful letting agency along the way. He runs www.property-investment-blueprint.com where you can download his ebook "Three Killer Property Investment Strategies That Don't Require a Bank" for no cost.

 

 
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