5. THE real estate property
The fifth source of down payment capital is the real estate property itself. The real estate investor who is on his toes learns to recognize aspects of a given real estate property that might be sold off to raise funds for the purchase. The variations are endless - everything from fixtures to parts of the land itself. There are two techniques that belong to this category.
Technique No. 22 Splitting Off Furniture and Other Items
Two years ago, one of the Nothing Down graduates in Florida was $5.000 short of funds needed to purchase an option on a valuable tract of land near Orlando. While wandering over the real estate property one day pondering how he might come up with the necessary capital, he noticed a large area overgrown with beautiful ferns of the type one finds offered for sale in florists shops. Since problems often lead to creative solutions, he put two and two together and arranged to split off the ferns to raise enough money to bring the deal together. Today, the real estate property is being developed into a multi-million dollar recreational park all because of a patch of ferns - and a creative mind.
Technique No. 23 Splitting Off Part of the real estate property
In some cases a given real estate property is structured so that parts of it - extra lots or individual buildings - can be split off and sold to raise funds for the acquisition. Here is how it worked recently for an investor we know in West Bend, Wisconsin. He had located an attractive single family home on a large lot with a package price of $99,000. Since he needed to come up with a hefty down payment - he resurveyed the real estate property and established two lots on either side of the house. By the time of closing one lot had sold for $15,000 and the other for $10,000. Contributing the bulk of the down payment to acquire the real estate property in the first place. It was all taken care of in a simultaneous closing.
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