My REI Plan - Part 2: Methods

Introduction
The Methods section of my REI Plan is to detail what techniques I plan to utilize in Real Estate Investing to realize my goals. Without a clear understanding of the tools involved, it will be almost impossible to build my dream.

Note: As my REI venture unfolds, there may be a need for me to either adjust one or more tools and/or add/delete tools to my inventory.


Flipping Properties
Find motivated sellers with properties that have 70% or less ARV, sign a contract, and assign the contract to a wholesale/retail investor. With experience, I'll try to rehab myself and close with a retail buyer. In the very beginning, and even throughout my REI venture, there will be times where I willbirddog for other investors as well as being a dealer or rehabber.

Minimum Profit/Deal: $1,000 (birddog), $5,000 (assign), $20,000 (rehab)
Minimum Cashflow/Deal: $0


Subject-to / Contract for Deed
Find motivated sellers who are willing to sign over their deed, but keep the mortgage loan in their name. My initial goal will be to find sellers with at least 20% equity in their home, and are willing for me to take over their payments with little out-of-pocket expenses on my account. The best seller would be one willing to pay for all costs associated with the deed transfer. IOW, a true no money down deal. Before closing, I would have a wholesale (or retail) buyer lined up, and assign the contract to them. With experience, I may even do a double close with a retail buyer.

Minimum Profit/Deal: $5,000
Minimum Cashflow/Deal: $0


Short Sales
These seem like one of the harder deals to make, since you are working strictly with a lender (who may or may not be as motivated as the seller). Many times, they have set criteria that they will not budge from (82% BPO?). However, if the need arises, I am willing to make the effort for a profit. The criteria for this is (1) property has no equity, (2) seller behind in payments, (3) and property not in good condition.

Minimum Profit/Deal: $5,000
Minimum Cashflow/Deal: $0


Lease Option / Lease Purchase / Rent-To-Own
Along with assigns and sells, I'd also like to add L/O's to my portfolio, eventually. These can become big cash cows when the T/B decides not to buy. However, even if they do elect to purchase, you can still make out with a nice profit. L/O's are also good, because you can get a nice cashflow going in times when other REI methods aren't working.

Minimum Profit/Deal: $5,000
Minimum Cashflow/Deal: $250/mo.


Rentals
Same as with L/O's. Only difference being these are more long-term holds for cashflow and appreciation sake.

Minimum Profit/Deal: $0
Minimum Cashflow/Deal: $250/mo. (w/staged increases)