Creative
Real Estate Investment
by: Steve Gillman
An example of creative real estate investment? When I
was young, I had a job that paid $3.40 an hour, and I
somehow saved enough to buy my first piece of real
estate - 2 acres near where I lived. It cost $3,500.
I spent a few hours
removing brush, outlined a driveway with logs, and hand
painted a sign. Two weeks after I bought it I sold the
land for $4,750, with $250 down, $100 per month, at 11%
interest. With the capital gain, my annual return on
investment was over 20%. This was my first real estate
investment.
Creative Real Estate
Investment - The Key
I bought the land cheap,
because the seller needed fast cash. I solved his
problem. I sold the land higher than the market value
because the buyer needed easy terms. Second problem
solved. Solving problems is the key to creative real
estate investment.
Cell phone companies,
radio stations, police departments and others need hill
tops for their towers. The problem is that they can't
tie up their capital buying them. One creative investor
found a way to solve their problem.
He got six month options
on hill top properties for a few hundred dollars. Then,
when he found those who needed them, he would get a long
term lease signed. They built the tower themselves, of
course. With a lease in hand, it was easy to get
financing to exercise the option and buy the properties.
He invested a few hundred dollars to create years of
income.
Trees are needed by
lumber mills. A friend of mine solved this problem by
letting a company cut half the trees on his small
property. They paid $4,500, and I couldn't see the
difference when they were done. The property was worth
as much the day after the cut as the day before. My
friend lived there, but a creative investor could buy
property like his, sell half the trees, maybe clay or
gravel too, and then re-sell the land.
To solve problems, you
have to figure out what they are. Do people need easy
terms? Cleared lots? Lumber? Better access to a piece of
property? Smaller pieces of land? Condos instead of
apartments? The list could go on. Just remember that
solving problems is the key to creative real estate
investment.
