NETWORK. REFERRALS Getting your name out there and letting people know you’re actively acquiring real estate deals can naturally bring you opportunities. This deal is a perfect example: if the person who referred it to me hadn’t known that I was doing deals, they wouldn’t have brought me the opportunity. It may seem obvious, but sometimes the most straightforward strategies can lead to the most profitable outcomes. Deal Context: We leveraged an existing property in our inventory to optimize this opportunity while maximizing profits from an otherwise vacant property. Deal We’re Trading: • Property Location: Commerce, GA • Acquisition Price: $350,000 • Financing: 3.5% interest rate on a subject-to existing mortgage $261k left • Initial Investment: Approximately $35,000 (closing costs, arrears, etc.) • Monthly Payment (PITI): Roughly $2,000 End Buyer: • Situation: Family relocating from New Port Richey, FL • Current Property: They own a house worth approximately $250,000, with a $162,000 mortgage balance. We agreed to pay $228,000. The property hasn’t been listed yet. Exit Strategy: Collateral Trade w/ Lease Option The strategy we’re using here is a “collateral trade,” which allows us to achieve several key goals: 1. Move Existing Inventory: We can offload a vacant property that’s currently costing us in terms of lost cash flow. 2. Maximize the Option Fee: By structuring the deal creatively, we can secure a higher upfront payment. 3. Tax Benefits: Continued tax benefits since ownership does not officially change hands until the end of the agreement (option period) allowing us to run cost segregation studies on these deals. 4. Less Headache: With a lease option tenant that has equity at stake they are more likely to not default since they have skin in the game, more likely to respect the property etc. How It Works: 1. Trade Equity: We agree to take over the buyer’s existing mortgage of $162,000. In exchange, we credit the equity from their current home as a promissory note toward the purchase.