Creative Real Estate Investing

I had a job that paid $3.40 an hour, but I saved $5,000. I used $3,500 to buy my first piece of real estate - 2.5 acres near where I lived. As you may have guessed, this was many years ago.

Four hours removing brush, and raking, and it was ready to sell. I painted a for-sale sign, and two weeks later sold the land for $4,750. The terms were $250 down payment, $100 per month, at 11% interest. With my capital gain, the annual return on my investment was over 20%. That was my first experience with creative real estate investing.

Creative Investing Is Solving Problems

I bought the land a under market value, because the seller needed cash fast. One problem solved. I sold the land a little over market, because the buyers needed easy terms. Two problems solved. Creative real estate investing is always about solving problems.

Radio stations need hill tops to put their radio towers on, but can't tie up their capital. One creative investor optioned hill top properties for a few hundred dollars, found those who needed them, and signed long term leases. With leases in hand, it was easy to get financing to buy the properties. He invested a few hundred dollars, and created years of income.

Lumber companies need trees. My friend helped solve this problem by letting a company cut trees on his small property. They paid $4,500, and you know what? They were so careful, I couldn't tell the difference

when they were done. The property is residential, and it was worth as much after the cut as before. A creative investor could buy property like this, sell half the trees, maybe sell clay or gravel too, and then re-sell the land.

Consider what people need. Easier terms? Cleared building lots? Lumber? Improved access to a piece of property? Smaller lots? Condominiums instead of apartments? The list could go on. When you think about creative real estate investing, think about problem solving.

If you found this article on creative real estate investing useful, you may want to also read the article on creative financing.