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REAL ESTATE Real Estate Formulas

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AroundTheWorld

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Solve Your Real Estate Problems Here

This link is mentioned in a different thread, but MJ suggested a thread dedicated to the topic.

Here is a link to Real Estate Forumula's.

In short, a formula is a way to solve a real estate problem or accomplish a real estate goal. There is a WEALTH of info and ideas here. So...

  • Anyone see a formula you want to hear about on a more in depth level?
  • Anyone use a formula with success and want to discuss it here?
  • Anyone have a real estate problem - and want some ideas on which forumula could work for you?
 

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Last edited by a moderator:

rzach41

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Oct 23, 2007
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very informative website. great find! rep++

ryan
 
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AroundTheWorld

AroundTheWorld

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This is a formula I am looking at: (I may have described this elsewhere - if so, sorry for the duplicate)

Let's say I am a beginning Real Estate Investor and I have collected some SFR's. I'm interested in now moving up to multi family. Exchangor's start with 3 key numbers: Value, Loans, and Equity. Here it is for the handful of SFR's:

TOTAL VALUE: 1,500,000
LOANS: 900,000
EQUITY: 600,000

Now. I want to get rid of these SFR's and into a multi family or other commercial. What can I do? I can find an exchangor with a commercial property worth 2,000,000.

I can pay off my houses and deliver them to the exchangor as a down payment. Now, I've delivered 1,500,000. I still need to pay the exchangor the difference of: 500,000 - and I need to pay off my houses (so that I can deliver them free and clear)

My total loan requirement to pull off this exchange is: $1,400,000 (900,000 house payoff plus 500,000 additional loan) This is approx an 70% LTV.

Why would the owner of the multi or commercial go for this deal?

A number of reason's. Perhaps they have moved and that property is no longer geographically comfortable. Perhaps there is a split in the partnership - and these separate houses will help the partnership dissolve. Perhaps they are ready to retire, and could use a vacation home or two.

Also - by delivering these houses free and clear, we are delivering what is called a 'crank-able' asset. The new owner can 'crank' money out of the property. They can either keep it free and clear and rent it out for cashflow - or they can finance each of them. Rents can cover the debt - and they have the additional cash.
 
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AroundTheWorld

AroundTheWorld

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This is another of my favorite forumulas....

Problem:
HAVE EQUITY - - - NEED CASH

Do you have a property with equity - - - are unable or unwilling to move that property right now - - - but you need cash?

Create a Note using the equity in your property as collateral. Make payments on your note for a bit to season it. Then, sell the note for a discount.

Walla. Cash in Hand.
 
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AroundTheWorld

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Help Someone Generate Cash - -
Get Rid of Your Property - - -
And Get Some Cashflow Too!​


Right now, there are investors out there looking for BIG CASH so they can buy REO's in bulk for pennies on the dollar. They have assets that are not crankable. (like notes backed by real estate)

You have a house with equity.

What can you do?

You exchange your house for the note.

Now, they have a house. They can go to the bank and get financing. Walla. The cash they want.

You now have the note (backed by real estate) and income without the landlord headaches.
 

M&T

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Oct 2, 2007
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great info. I gave rep speed for that one!!!
 
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AroundTheWorld

AroundTheWorld

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As the real estate market continues to go through these strange time - - the use of creative real estate practices, exchanging, and formulas becomes more attractive.

Anyone putting some of these formulas to work these days?
Anyone see a formula here that could work for you?
 

Runum

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I dont' recall seeing this thread earlier. It is going to take some time to digest those formulas. Thank you for bumping it.

I got a call to day from someone wanting to sell their house to move away. I don't think they have a lot of equity in it and may even be top heavy. I have been trying to figure out a way to help them and me too. Maybe I can get something from those formulas. I kinda thought about RCardins subject to move. I don't know yet.

Thanks again +++speed

Well, sorry ATW, can't speed you now, gotta spread it around.
 

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OP
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AroundTheWorld

AroundTheWorld

Be in the Moment
Speedway Pass
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1,887
550
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Ya, that is how I was at first too. It really helped me to talk through it with someone else. If there are any here you want to "talk through" - - post them here, and we can all work through them.
 

EasyMoney_in_NC

Contributor
Sep 9, 2007
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Wilmington NC
I'm not seeing the big picture on the formula that puts a note on my f/c properties. I pay myself for my property to establish it? Then I sell that note and have to pay someone else? So would I need to inflate my note value knowing that someone will want to buy it at a discount? Do I keep the terms cheap so that my end result is a purchase of (something) and have a cheap payment?

I've never been a big fan (although I watched the infomercial a million times) of the Carleton Sheets type deal makings. I know the theories probably work, but I'm not good at conjuring up those type of deals/formulas/terms.
 

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