Maximizing investor returns in today's real estate investment market has many facets.
Do you flip the property that you just bought at trustee sale or do you hold, rent and wait for the market to appreciate?
When making this exit strategy decision, there are many variables to consider.
One important variable is what is the yearly return expectation of the investor? If your investor is passive and conservative, then first deed of trust investing may be a fantastic solution.
This lets the investor have a set return on their investment, such as 10% annualized. Their upside is based on the future sale of the property depending on how the optionee contract is written.
Ex:
3bed/2bath tile roof house in west valley.
Rents for $800 per month with high demand.
Purchased in May 2010 for $65000
Background information:
2005 value - $225,000
Todays value $90,000
Estimated Value in year 2012 - $125,000
The First deed investor is acting as the bank and is getting an interest only payment of 10% per year.
The first deed of trust investor can participate in the future sale of the property with the optionee that is making the 10% interest only payment.
The potential income return on today's foreclosure distressted is tremendous!
So, instead of putting the property back into the mls and selling at a cheap price, you can now maximize the future sale of the property in 2-3 years while having a positive cash each month.
Do this 100 times and you have created financial wealth!
Arizona First Deed of Trust - Investing in foreclosure and trustee sales
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