Real Estate Investing – The Greater Good
by James Miller
So much of the focus on Real Estate Investing seems to be on making money. That is the first and truest motivation for what we do. I feel that there is nothing wrong with this. Being a capitalist, I think anything that gets the Money moving in our economy actually does us good.
But before I turn this into Gordon Gekko’s Greed is good speech, I want to talk about the other side of what we do, when we buy or sell a place using creative real estate techniques. I want to talk about how it helps people and the overall good it does.
Think of the benefits to our local economy and community when we do the following investing action:
When we buy a fixer upper, repair it, and resell it with seller financing:
1) We are saving this home from further ruin that time can create. At some point homes become so deteriorated that after enough time only the only choice is the wrecking ball. By saving these homes we are indeed recycling them and keeping a large amount of material out of the landfill.
2) We raise the property values in the local neighborhood. This may or may not happen to any significant degree, but it makes it easier to sell your house if it is sitting next to a freshly restored Victorian, as opposed to being next to something that looks like a haunted house.
3) We increase local tax revenue. While we never like to see it coming, we benefit the community by creating more assessed value in a home that benefits the tax roles. This is a dollar savings that minutely lowers everybody elses taxes.
4) We minutely lower the cost of housing by providing another viable living space.
5) We give hope, usually to a family that is transitioning from renting to the American dream of home ownership. We are providing renters a way to start building equity in their home even though they may not be able to qualify with a bank right now.
6) We give hope, to the seller we buy from who could not move their home otherwise. This is especially true in this tight market. I have talked to Realtors who have sold nothing over the past six months.
With our ability to sell via lease options and other creative means, we are constantly and consistently able to sell homes.
7) We are good for the economy. I believe that if there were a massive push from our government to educate it’s population on the ways of creative Real Estate Investing we could pull out of this economic slump without the need for huge bailouts.
The banks would still have to take a hit, but a nation of savvy and creative Real Estate Investors and home buyers could eliminate the inefficiencies in the market.
If you think about all of the people out there right now who would gladly rent or sell their property with creative financing, just to get out of it, but they don’t know how, so they are letting it go into foreclosure.
Compare that against the amount of people that are ready, willing, and able to come up with a little money down and make the monthly payments in order to get into a home of their own… but they don’t know these options exist.
If you compare these two things then we know that there is room for us to make a difference in our economy without a huge infusion of bailout cash.
…..Then again, maybe I am just an idealistic dreamer.
Since posting this I have read Francine Hardaway’s open letter to two mortgage companies. In her blog, she talks about how much better things would be for her and her lenders if they would accept a reduced interest rate as opposed to her only other option…Foreclosure.