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The Midas touch Formula for Buying a House.

By Arlene Wright-Correll

It is an "etched in granite" fact that one must buy wholesale today in order to make a profit whether it is in single family homes or candy bars even when you pay retail or especially when you pay retail. So how does one go about that?

This author has many such real estate techniques to draw upon and one of our favorite is "The Midas Touch" formula.

One needs to find a newspaper full of mortgages for sale or to place an ad that states you buy mortgages. In the event you ever get a call asking if you sell mortgages, immediately say "NO" unless you have a mortgage broker's license. Many states do a sneaky job of checking up on you that way since they have a tendency to monitor such ads.

Just as we attempt to buy houses at 50% on the dollar, we can buy mortgages the same way.

Suppose we want to buy a $100,000.00 house and we locate one that is free and clear. The owner is willing to do the financing. Many people don't want the headache of the property any more. They are willing to take good cash flow instead of all the cash right away. We offer him his $100,000.00 asking price and the method of payment is $100,000.00 in good seasoned mortgages and the seller agrees to it.

We simultaneously have been looking for these mortgages to buy and we buy them subject to closing them within 90 to 120 days. We first accumulate a sizeable quantity of real estate paper. It may be 5 or 6 smaller mortgages or trust deeds. The total face value is $100,000.00. However, we purchase it at a discount of $50,000.00. Remember to always put and/or assigns after your name as the buyer.

The rates on all these mortgages will be different. However, the average rate will be 9% which is a lot better and safer than the seller's equity was in the event it was in the form of cash in a bank savings account or CD today.

At this point we become a combination of Chinese plate spinners and runners. It is important to remember you must make small contingencies in your contract so you can perform when the time comes. One such contingency might be subject to obtaining financing on the subject property satisfactory to your in your sole opinion. Allow enough time and make the closing date on or before a certain time subject to your option. In other words, when you say close, everyone closes!

You simultaneously go out and get an 80% loan on the house so you have $80,000.00 cash on the table. This could even be a one year private loan at interest

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