Become The Bank & Hack Your Way To Wealth
So today I wanted to … first of all I hope you are all having a great day. Anybody who gets to read this, I appreciate you. My name is Ben Fredricks with Odell Barnes REO and today I’d like to talk to you about, becoming the bank. So you’ll hear me in my videos and posts preach a lot about cash flow, and I want to show you some examples of what it is that we do, and some stuff that you can emulate as an investor on yourself, and even maybe do with our properties.
We buy properties in bulk, usually they’re bank owned properties or auction properties, and you know, our ultimate goal is to become the bank. So we can create notes and basically create positive cash flow that will ultimately replace any income we’ll ever need. I wanted to show you an example of a deal that we have right now that is in Montgomery Alabama and how you can, if you’re a new investor, how you can sort of hack your way into the business without a lot of money out of your own pocket.
Actually it will be with zero money out of pocket if you do it right. I’m going to show you this example. We bought a property in Montgomery Alabama, and right now we have it on our website for $20,000. We might flip that property, we might end up getting the note on it, but what I want to show you today is how it would look if we sold it to an investor that does a note with us. Let’s say, for instance, you buy this property for $20,000, and then you take $5,000 of your own money to give us as a down payment. Now, I know what you’re thinking, well this isn’t exactly no money down. I’m going to show you exactly what I mean here shortly. So, you pay us a payment of $200 a month, and and over 12 months is $2,400 a year.
Now the great thing about this property is that there’s a lot of meat on the bone. All over the country there are people that are going to be looking for owner financing because, well they may not qualify, they might have a bankruptcy in the past, they have credit issues, they don’t have 20% to put down, whatever the case may be. So what you could do as investor of this property, is offer owner financing yourself, so you’d have what we would call a wrap around note.
So after acquiring this property, you can sell it for $35,000. And this property’s value is probably somewhere around $50,000, so it’s really appealing to a homeowner that wants to buy the property because they’ll have some built in equity right?
And there’s going to be repairs that are needed to this house, there’s no question about that. Here’s the bonus, you don’t do any of the repairs. You’re going to leave that to the new buyer. So they’re going to give you a $5,000 down payment. Now all of a sudden, you’ve gotten your entire $5,000 down payment that you made to us, back right away. Now you’ve got a pretty good deal so far, right? So let’s look at what happens when you get the payment from them. You’re going to charge them a $400 a month payment, $4,800 a year and now you’re profiting $2,400 a year. Now, obviously I’m not taking into consideration any vacancy, or any servicing fees if you decide not to service it yourself. But here’s the good news, you don’t have to fix any toilets, no repairs, no taxes, and no insurance.
So this is all profit to you. Here you’re in a deal with no money out of pocket because you canceled it out, and you have a note that’s paying you $2,400 a year. The return on that investment is infinite. This an example of how you can become the bank, and you can actually use our properties to do it. So if you want to see some properties that we have around the country, you can check them out at www.odellbarnesreo.com. And if you have any questions, obviously shoot us a pm, or feel free to give us a call, all right.