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There are many real estate investors who have been successful following a proven business plan that starts with the purchase of a targeted property, followed by whatever up-dating, renovation, or rehab is necessary, in order to quickly market and re-sell the property at a nice profit. Experienced investors sell tickets to seminars across the country, inviting others to share in the wealth and potential in various real estate strategies. These people are not my audience, although I wish them continued success. My proposition is one that is often overlooked, in a particular market that offers a mutually beneficial upside and potential, if the investor has the patience to accept a longer time period for return on the initial investment, and some desire to participate in community building.

Real estate can still be purchased in rural and depressed markets at bargain basement prices. I have purchased homes for as little as $10,000 cash, and marketed them myself in small communities in Texas at a good profit in a relatively short amount of time. After a personal inspection of the property and some research into the housing market of the community, a title search is the only other due diligence needed.

Rather than performing any rehab, or as little as possible to make it livable, the house is immediately marketed 'as is,' with owner financing. A 'For Sale By Owner' sign, some flyers posted around town, and an ad in the local paper usually provide plenty of potential purchasers. Most of the homes I have marketed were solid bargains in the 29-40k range, and most buyers, even those with less than perfect credit scores, were able to acquire at least the 10% minimum down payment requirement, as well as required insurance. After a credit check, the buyer and seller execute a Deed of Trust Mortgage and insurance binder, and the property is exchanged. It really is that simple.

After closing, the investor retains the down payment, a vendor's lien on the property, and a 10, 12 or 15- year mortgage at 14.25% interest. After this, one of two things will happen. Either the buyer will pay his mortgage faithfully, which, over time, will transform the mortgage paper into a valuable financial instrument, or, in the worst case, the buyer defaults, and the property is foreclosed and resold.

Generally, the investor can expect at 25% rate of default, but with careful buying, and setting the term so that the monthly payment is comparable to area rentals, it is easy to find a qualified buyer who is willing to commit to the purchase with a significant down payment, reducing the chance of foreclosure. Finally, after a payment history is established, sometimes in as little as three months, the mortgage is marketed and sold, and the investor's cash and profit are returned in a relatively short period of time, with minimal time spent on unneeded major improvements to the property.

Perhaps most real estate investors aren't aware of the size and potential of this market, or of the families whose lives are changed when they find their own version of the American Dream with the purchase of their first home. In my experience, this market has been, unfortunately, passed over and undervalued, and although I may never completely need (or want) to understand and maintain the business side of this plan, I am proud to attest to the positive difference that homeowners make in small communities where modestly priced homes are rarely offered, or traditional financing is unavailable or denied to potential buyers. This is the real niche in real estate for me. Both sides win.