This is kinda long but I think each of you will enjoy reading it.
It is written by Kenny Rushing.....
TOP 10 REAL ESTATE SECRETS EXPOSED!
THE FRONT END & BACK END MONEY SECRET
THE MERRY-GO-ROUND SECRET
THE REHAB CONSTRUCTION MONEY SECRET
THE SELL YOUR HOUSE TO YOUR WIFE SECRET
BUY A HOUSE WITH AN ATTACHED BUILDABLE LOT SECRET
BUYING THE ENTIRE NEIGHBORHOOD SECRET
THE PLANNED DEVELOPMENT SECRET
THE ASSIGNMENT OF CONTRACT SECRET
THE BUYING CONDEMNED HOMES SECRET
THE CONSULTANT RETAINER SECRET
Secret # 1:
THE FRONT & BACK END MONEY SECRET
In order for this method to work, you have to build a relationship with a private lender.
He must trust you or he will never allow you to structure a deal this way.
However, if you are able to convince him to structure the deal this way, it could allow you to put your profit in your pocket from the front end instead of
waiting until you sell the home.
I call this the “Front & Back End Money” secret. It can be great for times when your cash flow is tight and you need a surplus of capital to fund other
Here is how it works.
After the private investor agrees to structure the
deal this way you can proceed as follows.
1) Contract to buy a house: Let’s say you buy a house needing minimal repairs for $60,000. The house has an “as-is” value of $120,000 and an After Repaired Value of $155,000.
2) Obtain a Private Loan: The lender will loan you 65% of the After Repaired Value = $100,750, less the closing cost of $10,075 (estimated at 10%) = $90,675.
Ask the private lender to allow you to “cash out” $20,000 with the remaining balance of $10,675 to be placed in an escrow account.
The $20,000 is your “front end” money. Don’t be hesitant to ask your private lender to structure the deal this way. You will be very surprised
how many private lenders don’t care as long as they trust you will make good on the loan.
I have cashed out upwards of $50,000 on the front end.
Sell the House Wholesale:
Sell the house to another investor wholesale.
Let’s say you sold it for $102,750. Now you will start to make money from the back end. Starting with making a generous profit of $2,000 (from
the sale). Then request that the private lender release the $10,675 from the escrow account. Now you have put together $20,000 + $2,000 + another $10,675 for a grand total of $32,675.
Structuring the Front & Back End Money Hustle with a private lender does require a great deal of trust.
Don’t expect all private lenders to structure
deals like this on the first go round. It takes building a relationship. Today, I have five or six private lenders I can call upon who will all structure this type of loan.
However, keep in mind that I have been doing business with these guys for many years. Build relationship with these guys and the sky is the limit.
Secret # 2:
THE MERRY-GO-ROUND SECRET
The Merry-Go-Round Secret is one of my favorites. With this secret I’m like a Merry-Go-Round. I go around and around until all parties involved with
any of my real estate transactions pay me.
Just think of me as the person who pushes the Merry-Go-Round while everybody enjoys the ride, but this ride, my friend, comes with a price. I’m not
pushing your guys’ heavy butts for nothing! You know they say you have to, “Pay to play!” And this Merry-Go-Round ride doesn’t come cheap.
I realized many years ago that, if not for me, no one involved in the real estate deal would make money. Therefore, I strategized a way to be able to
maximize my profits on every real estate deal.
Whenever I sell a house, I require everybody to pay me. You heard me right, “pay me!” That goes for the title company, the hard money lender, the contractor, the realtor, the mortgage broker, the insurance company and anybody else who may become involved with one of my deals.
It boils down to—I have the product (houses) and everybody I just named above needs me in order to make money.
Here is how the Merry-Go-Round Secret works:
1) Title Company: When I sell a house to a buyer I submit the contract to the title company. I have an agreement with the title company to pay
me a referral fee.
2) Private Lender:
When I arrange for a client to buy my house using
one of my private lenders the lender pays me a referral fee.
3) Insurance Company:
When I arrange for a client to buy a Builders
Risk Insurance policy from an insurer in my network, the insurance company pays me a referral fee.
When I arrange for my client to use one of my contractors to rehab his house, the contractor pays me a referral fee.
When I arrange for my client to use a realtor who is a part of my network to sell the house, the realtor pays me a referral fee.
6) Back to the Title Company:
When my client sells the home to his
buyer, we are back at the title company and they pay me another referral fee.
With this deal, let’s say that I purchased the home for $65,000 and sold it for $80,000. I made a $15,000 profit from the sale of the home. In addition to the
$15,000 profit, I just made referrals adding up to another $5,000. Now my profit is at $20,000.
All referral fees I collect do not come in the form of cash. Some real estate professionals cannot legally pay cash referrals, but can offer other types of referral compensation, gift certificates, discounts when using their services, and other
The Merry-Go-Round is a great secret because it allows you to make more
money from the sale of your homes. There is nothing unethical about this. Everybody wants to make money off you, so why don’t you make money off everybody?
Secret # 3:
THE REHAB CONSTRUCTION MONEY SECRET:
Who doesn’t put a cushion on the rehab construction cost? I have certainly been guilty of it. I would prefer to have more money in the escrow account for
repairs than to run out of money and have it come out my pocket to finish the job.
In addition, there is another little trick that you can use to guarantee the job gets completed and puts tens of thousand of dollars in your pocket immediately
after you get your final inspection from the private lender and a Certificate of Occupancy from the city inspectors.
For simple math, let’s say that you take out a loan with a private lender to buy a $50,000 home with $10,000 in “real” repairs and an After Repaired Value
The lender will loan you 70% of the After Repaired Value = $87,500 less $8,750 closing cost (estimated at 10%) for a total of $78,750.
The “real” repairs to rehab the home are only $10,000. However, you put a little cushion in the estimated repair sheet you submitted to the private lender to reflect a repair cost of $28,750.
Three weeks later you rehab the home and spend only $10,000. You receive a Certificate of Occupancy from the building department, the lender inspects the
home, and it passes the inspection.
What about the remaining $18,750 that is in the escrow account? Guess what? The lender has to cut the check to you.
In addition, if you are handy with a hammer and nails and are willing to earn some “sweat-equity,” the Rehab Construction Money Secret works great
because you can lower your expenses on your rehab construction cost and put more of the remaining rehab escrow funds in your pocket after you are completed
with the project.
Secret # 4:
SELL YOUR HOUSE TO YOUR WIFE SECRET:
My wife and I both own businesses. My wife owns an interior decorating firm; however, she is my wife so you know she is also a real estate investor (it’s
the family business).
With this business, my wife will occasionally buy and sell houses. Who do you think she is going to turn to in her need for a great wholesale deal? Well,
I better hope it is not those other guys!
When my wife gets the urge to buy, I sell her a house just as fast as I would sell you one. Okay, maybe I give her a slightly better deal!
Or, maybe we are both in cahoots to make a big score. Maybe we need some Christmas money, or maybe we feel the need to take a cruise somewhere at the expense of someone else.
With private lenders fighting all over each other to loan me money, who wouldn’t want to loan money to my wife? We are married and share the same house.
Let’s just say I contracted to buy a home for $45,000 with $10,000 in repairs and an After Repaired Value of $150,000.
I arrange to get my wife approved for the loan at 70% Loan To Value (LTV). This means the lender agrees to loan my wife $94,500 after closing costs.
The seller gets their check for $45,000. I get my
assignment check for $30,000, the remaining $19,500 goes into an escrow repair fund.
My wife and I say adios to you guys and go on a cruise to Alaska.
Okay, I would love to go on a cruise to Alaska, but what did my wife and I
really accomplish by structuring this deal? Here is what we were able to do:
1) I didn’t have to hunt down a buyer for this house because my wife bought it from me.
2) We are married and work as a team. Therefore, we were able to raise a quick $30,000 from the assignment fee I made from selling her the
3) After the $10,000 in repairs was complete, we put another $9,500 into our pocket from the rehab funds remaining in the escrow account.
4) When we sold the house we put another $35 - $50,000 (depending on how much we sold it for) in our pocket (excluding holding cost, realtor’s
commissions, and other closing costs).
The Sell Your House to Your Wife Secret works! I have used it and the results were very similar to what I have described above. This is a great method
for beginners who are trying to find a way to raise some quick capital.
In addition, this hustle can apply to your girlfriend, friend, business partner,
or family member. It doesn’t matter as long as you are working as a team. It worked well for me and my wife because we are both entrepreneurs and work
well together. This was only one of our deals out of many.
Secret # 5:
BUY A HOUSE WITH AN ATTACHED BUILDABLE LOT SECRET:
I love buying houses with attached, buildable lots. These deals can be very lucrative. It’s like going to a 2-for-1 sale. Sometimes you can pick up both
properties for the price of one.
This is one of my favorite top secrets because it just makes good business sense to buy into these deals when the price is right.
Recently, I purchased a house with two buildable lots for an amazing $65,000. Here is the good part. The lots were buildable and each of them had
their own separate folio numbers.
The house alone was a 3 bedroom, 1 bath, 1,100 square foot home that only needed $15,000 in repairs and had an After Repaired Value of $120,000.
Here is how I structured this deal:
1) Contracted Separately: I contracted all the properties separately.
Therefore, I wrote up three contracts. I contracted the house for the $65,000 and the two additional lots for $1.00 apiece.
2) Borrowed Money: I called my private lender and told him I needed to borrow $65,000 to buy the house. He loaned me 70% of the After Repaired Value of $120,000, which was $84,000. After the $8,400
closing cost (Estimated at 10%), the loan was for $75,600.
3) Closing Instructions: I informed my title agent to close all three deals
at one time. The loan covered the price to buy the three properties with
the remaining $10,600 going into an escrow account for repairs.
The mortgage from my lender was placed against the house and not the
two adjacent lots. Therefore, I owned the two lots “Free and Clear.”
I immediately put the two lots back on the market for $20,000 per lot. I
settled on a builder who purchased both lots from me for $35,000. We closed the
deal only 3 weeks after I had bought the house and lots.
Soon afterwards, I rehabbed and sold the house for another gain of $16,500.
My total profits on this deal were $51,500.
The Buying a House with an Attached Buildable Lot Secret is a great way
to make money (by selling the lots) before the principal house is rehabbed or
resold. There are tons of these deals out there—you’ve just got to find them.
However, when you buy a house with a lot, you need to make sure that the
lot is a buildable lot. If the lot is not buildable, you will have to be approved for
The variance process can be quite lengthy (8-12 weeks). You have to
request a hearing, normally with the City Council, to argue your case for why
you should be allowed to build on the lot. It is up to the City Council to approve
or disapprove your request.
Personally, if I know the lot attached to the house is not a buildable lot, I
look towards the house to make a profit. If the numbers don’t work for me
buying and selling the house for a profit, I don’t buy the house. I don’t like taking
a gamble trying to convince the council to give me a variance.
In addition, if the properties don’e have separate folio numbers, you may
have to pay an attorney to have the lot separated, which can cost you upwards of
$1,000 (depending on where you live). It normally takes 2-4 weeks to have this
Separating the lot from the house is much less risky than trying to get a
variance. I have gone this route on many occasions and so far I have always
been able to separate the lot and sell the lot for a profit.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"