Number 5: No Hazard Insurance

No fire insurance, no liability insurance, no earthquake insurance. No insurance, period. The last time we checked, any kind of hazard insurance is expensive. And real estate lenders calculate a monthly insurance payment when qualifying you for a real estate loan, even when you prepay the insurance premium in an escrow account for the next year.

Number 4: No Property Taxes

Depending on your state, you may pay property taxes once or perhaps twice a year. In states like Texas, where there is no state income tax, property taxes can be quite substantial on even modest properties.

On a property valued at $137,000 by the county tax assessor in our area near Fort Worth, the annual property tax bill can amount to $4,000! If you calculate that on a monthly basis, you are paying $333 a month for every month you own the property.

Number 3: No Monthly Mortgage Payments

Month in and month out, 12 months a year for 30 years: 360 payments. Lets look at an example. A $200,000 loan for 30 years at 8 percent interest is payable at $1,467.53 monthly, including principal and interest. Multiply the monthly payment by 360 payments, and you will pay a total of $528,310.80.

Monthly Property Taxes

Annual Property Taxes $

Monthly Property Taxes $

$4,000 $ 333

Monthly Payments

Monthly Payment 30 Years Total Payments

$ 1,467.53

X 360

$528,310.80

The really nauseating number is when you realize that you originally borrowed $200,000! You wind up paying $328,310.80 in interest. That is 164 percent of the amount you borrowed.

Amount of Interest

Total Payments Amount Borrowed Amount of Interest

$528,310.80 $200,000.00 $329,310.80

Number 2: No Landlording

Do we really have to tell you our landlording horror stories? Do you really think you can be a successful landlord? Being a landlord is a heartless, thankless job. No matter what you do, you are wrong. Okay, okay, we will tell you one of our landlording horror stories.

Landlording Horror Story Being a lord or lady of the land has a noble heritage. In olden times there was a symbiotic relationship between the lords and ladies and their tenants. The tenants lived on the lords and ladies property, raised their families, and farmed the land.

In return the tenants paid rent to the lords and ladies in the form of most of the crops they grew. There was no money. Or, at least, most people, like the tenants, did not have money because there were no jobs. Everyones job was working the land.

Unfortunately, this romantic symbiotic relationship from the Middle Ages has been shattered by the realities of todays world. As a landlord you are a target for other peoples problems. And as a target you become the recipient of a lot of crap. On to our horror story. We have so many. Concrete in the toilet. Concrete in the kitchen sink. Concrete in the oven. Which one would you like to hear? On second thought, we think we will pass. Too many bad memories. Bottom line:We recommend you avoid landlording.

Number 1: Quick Cash

And the number 1 advantage of the Quick Cash strategy is Quick Cash. Cash is king! Long live the king! The problem with real estate investing for most people is that it takes far too long to make any money. Yes, we know that if you bought a two-bedroom, one-bathroom home in Coro-nado, California, in 1968 for $20,000, like our friend John did, you would

be sitting on a property worth $900,000 today. But who has the time, or the patience, to wait? We dont; do you?

Flipping is your answer. When you are a real estate investor whose strategy is Quick Cash, patience does not have to be one of your strengths. In fact, being impatient becomes one of your strengths! You become impatient with the deal you are working on and want to get it done so you can get on to the next deal. The more foreclosure deals you get involved with, the more money you will make.

Flipping-First Attitude

We will give you several examples so you can get a sense of the many opportunities that flipping provides to make Quick Cash. By studying the examples, we hope you will start to expand the way you look at buying and selling real estate. When you have a flipping-first attitude, you will discover new ways to make money in real estate unforeseen by the average real estate investor.

When you apply a flipping-first attitude to the foreclosure market, you will have a competitive advantage over other foreclosure investors. Rather than just buying foreclosures on the courthouse steps, we will show you how to buy foreclosures in the pre-foreclosure stage directly from the seller. We will also show you how to tie up a foreclosure property with a contract that you can flip to another real estate investor. But first things first.

There are two main tactics in the flipping strategy. The first is what we call Find and Flip. You find a property knowing that you are going to flip it as soon as you can. You may close escrow on the property before you flip it. Or, you may flip the property even before you own it! The second tactic is what we call Find, Fix, and Flip. You find a property, you do the fix up as quickly as possible, and then you flip the property.

Find and Flip

Example 1 We found a seller who wanted to get out of his rental properties. We made an offer on a 600-square-foot studio efficiency condo in Del Mar, California. The property was tenant occupied and rented for