There are two types of landlords in the world. New landlords and landlords ready to get rid of their property out of frustration. If you can find a landlord that has a fixer up rental you can buy these properties once they go vacant for as little as fifty cents on the dollar. They have no income coming in on the property and they now are told they need to spend thousands to fix it up to make it livable. You then can buy the property, rehab it and then lease option it on a two year contract.
The two year contract is very important to the process of buying rehab properties and making money. The reason it is so important is because you own the property for two years and then you can do a 1031 exchange without penalty and buy other fixer up properties with the profits.
You can sometimes lease option a property the day you buy it to someone who wants a home that they can fix up themselves to earn the equity in the home. You are immediately making money from the 2nd day you own it and you may not have your first payment for 2 months. Then in two years you get a balloon payment for the property. If they don't end up purchasing the property, you have a partially fixed up property and two years of rental income.
You need to think outside the normal real estate box and work with a Realtor that understands what your goals are and how to help you reach those goals.
Todd Clark - broker
Kastings & Associates
© 2009 Todd Clark - Beaverton Oregon Real Estate: Rehab your way to riches buying rental properties