Creative Real Estate Investment

Here's an example of creative real estate investment: Many years ago, I had a job that paid $3.40 an hour, and I somehow saved enough to buy my first piece of real estate. It was 2 1/2 acres near where I lived, and it cost $3,500.

After a few hours removing brush and outlining a driveway with logs, I hand painted a for-sale sign. Just two weeks after I bought it I sold the land for $4,750, with $250 down, $100 per month, at 11% interest. The interest and the capital gain put my annual return on investment over 20%. This was my first real estate investment.

The Key To Creative Real Estate Investment

When I bought the land, I bought it cheap, because the seller needed fast cash. In other words, I solved his problem. I sold the land higher than the market value because the buyer needed easy terms - a second problem solved. Solving problems is the key to creative real estate investment.

Radio stations, cell phone companies, police departments and others need hill tops for their towers. The problem is that they can't tie up their capital buying them. One creative investor found a way to solve their problem.

This investor got six month options on hill top properties for a few hundred dollars. Then, when he found those who needed them, he would get a long term lease signed. They built the tower themselves, of course. With a lease in hand, it was easy to get financing to exercise the option and buy the properties. By risking just a few hundred dollars, he created many years of income.

Lumber mills need trees. A friend of mine solved this problem by letting a company cut half the trees on his small property. They paid him $4,500, and I couldn't see the difference when they were done. The property was worth as much the day after the cut as the day before. My friend lived on the land, but a creative investor could buy property like his, sell half the trees, maybe clay or gravel too, and then re-sell the land.

In order to so solve problems, you have to figure out what they are. What do people need? Easy terms? Cleared lots? Lumber? Better access to a piece of property? Smaller pieces of land? Condos instead of apartments? The list could go on and on. There are endless problems out there, and solving problems is the key to creative real estate investment.