Property master and author of ‘How to Buy a House for a Dollar’, Rick Otton, has debunked the myths on ‘property hot spots’ during a regular Creative Real Estate podcast. During a recent show, Mr Otton announced that property investors wishing to make long term wealth were better off ignoring real estate hot spots promoted by the media and industry analysts.
“The value of these so-called hot spots have already happened by the time people get there,” Mr Otton said.
“Not only that, when they get there, people have to invest a whole lot of capital, pay land taxes, stamp duty and other costs – basically bury themselves in debt. I have a whole different paradigm to offer.
“I reckon a hot spot is any place where I can buy a house for a dollar. What I mean is, pick up or babysit a loan on a house that someone else no longer wants. I can get that for a dollar rather than having 50 or 60 thousand dollars of my own money tied up in the hope system. Instead of getting a new bank loan, you pick up an old one.”
Property investment strategies
Mr Otton said people were often baffled about how to actually buy a house for a dollar in return for positive cash flow and a neat outright profit.
He explained that by picking up someone else’s loan they no longer wanted, the need for banking finance was sidestepped because the loan was simply transferred with the property sale.
“I can babysit and make payments on that loan for the outstanding length of that loan. If I wish to, I can buy and hold and build my property portfolio that way,” he said.
“To do that, if I pick up a house and the outstanding loan is around the value of what that house was, to make that paperwork work I’ve got to have a dollar that goes between the two legal firms representing the buyers and the sellers – creating a ‘transaction’. Then, I simply pick up the house and the loan that goes with the house.”
The real estate educator said another advantage to this strategy was that it took the emotion out of a property purchase because there was no financial risk.
“Plus you don’t have to pick the market’s highs and lows. You don’t need to gamble,” Mr Otton said.
For the past two decades, Mr Otton has coached more than 35,000 property investors around the world on his ‘no-money-down’ investment strategies, which do not require people to have banking finance, a deposit, stamp duty or even any real estate experience.
To hear this, and other free podcasts from Rick Otton visit CreativeRealEstate.com.au. Phone enquiries in Australia can be made on 1300 888 450.
