What's Your Return on Time?
by Julie
Broad
 Last week we had the pleasure of sitting down with BP, one of our 12 Months to $1 Million members who lives just a little north of where we are doing most of
our investing right now. We held a rent to own
information session for prospective tenant buyers and we invited him to sit in on it - on the condition that
he pretended to be a prospective tenant!
After the information session we reviewed a deal BP had found through some ads he ran on Craigslist. The deal was
complicated. A couple had gotten in over their heads with a second mortgage on their property and now owe more than
the property is worth today. And, now they are falling behind on the payments. BP was trying to figure out how he
could help them. He wanted to put together a deal that would get them out of their mess, and obviously, make him a
few dollars too.
When we broke down the deal, looked up comparables, and ran through the options I said simply to BP:
"There might be a deal here but best case scenario is you can get the property
with about $10,000 in equity AND that is after you do a lot of work convincing the first and second mortgage
holders of what you want to do. Then you're still going to have to do some work to make the property rentable.
It's not worth your time and effort."
It wasn't what BP wanted to hear but it was the bottom line.
I know there are courses out there that say they will teach you how to make money off properties that are
underwater ... and it can be done ... but the reality is that the techniques that allow you to do this only work in
a few specific situations. In all the other cases you'll end up spending an enormous amount of your time for very
little return. And that is what I want to talk about today.
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