In the current market place there are very lazy investors, who know how to invest, but cannot be bothered or just do not want to do it. I know of two partners running what they call ‘buyers and sellers agency deals’. They are making heaps of cash fast with little to no risk.

They are finding vendors who do not want to list conventionally and they sell on the vendor’s behalf. Nothing new here yet, but what you will see next is nothing short of brilliant.

They then vendor finance people into the houses via vendor finance arrangements. These are more than likely to be by way of a second mortgage or selling by installments over a 30 year term. Back end profits for these guys is fantastic for risking very little. I know if I could help other people sell their property on a vendor finance agreement that I could do literally 1000’s of these with no bank loans or investments required. I would even have a team of ’staff’.

But here is the genius to the business plan…

The money to be made is when they on-sell their interest to another party, who understands the flexible situation of financing people in installment or terms contracts. They may even choose to keep the trickle of income dripping into their pockets each month for 30 years.

Investors who want above average returns in today’s market are looking out for people who can create a mortgage for sale at a discount rate and the return can go on for 30 years if not paid out sooner by the borrower.

For instance, these guys obtain a 2nd mortgage from the vendor and sell the property.
They hold onto the 2nd mortgage of $60,000 and collect the interest payable on that amount until it is refinanced by the buyer. The Mortgage is then sold to another investor for cash of say $40,000.

The benefits to the first investor is that they have created $40,000 from the transaction without having to spend a cent or be in a risky situation, like flipping.

The new 2nd Mortgage owner is happy as he bought an income stream for $40,000 and will be paid interest on it and then receive the full $60,000 at the end of the term. Roughly a 150% return on their money plus the interest payable on the money until such time as the mortgagee pays it out. The best thing is that the investment is secured by real estate and thats much safer than other high returning investments.

The original vendor is not having to pay commissions on the property to agents who will hope and pray their system works, they have a professional investor who, with their blessing sells the property to new homeowners for the best price they can.

It’s just a great strategy of swapping pieces of paper around to make a profit in real estate. Its also a great business in its own right as you can be flexible in doing as many transactions as time and vendors allow. The buyers will always be there, its just a matter of being there to put the whole deal together.

I found that its hard to find a vendor to commit to selling their house, but you only need to find one to make a rewarding income until you get the next. You may even find you really cannot fit work in any more.

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