Creating sweat equity in real estate - Posted by Max Leeds

Posted by John Behle on March 26, 1999 at 15:22:26:

How about “Brain equity”? I don’t know, maybe brains sweat, but it isn’t as messy - unless your head explodes.

Here’s some brain equity solutions:

  1. THE PAPER TRADE - Create equity in a property by buying a note at a discount and then trading it at face value for a property.

  2. THE DISCOUNT REFINANCE - Discount the existing private loans on a property and refinance to pull out free cash from your brain equity.

  3. THE DISCOUNT SUBSTITUTION - If the private note holder won’t discount, find another note holder that will discount and then use a collateral substitution to free up the property and crank out cash. Just like the Discount Refinance.

  4. NOTE ENHANCEMENT - Use one of over 117 techniques to improve the value of notes (loans, seller financing) that you own, control or can own and control.

  5. LOAN RESTRUCTURING - You can make wonderful profits just by restructuring ugly financing on a property through negotiation or bringing in new consolidation financing.

  6. PROBLEM SOLVING - Solve the problems on a property or the loans on a property and make one or the other more valuable. An example is getting a property re-zoned or straightening out boundary line disputes (made some good money on one of those last year).

With a note it could look like buying a defaulted note for a great price and then assisting the note payor to refinance or re-instate the loan - making it more valuable.

Whew, my brain’s sweating already.

Creating sweat equity in real estate - Posted by Max Leeds

Posted by Max Leeds on March 26, 1999 at 13:34:03:

My English teacher has given our class a unique project: pick any topic we choose, fully research it, and write a report. My topic is creating sweat equity in
real estate, and while I know some information on it, I’m thirsting for more. If there is any information anyone could send me or any people you know of who I should talk to, I would greatly appreciate it.

I know the basics of sweat equity but not much of the little details that make a good report great.


Re: Creating sweat equity in real estate - Posted by Bud Branstetter

Posted by Bud Branstetter on March 29, 1999 at 11:57:15:


Not much help from people here on what makes a good report great or on sweat equity. Bill Nickerson wrote the original book on the sweat equity concept. He also was a buy and hold proponent. The concept of this newsgroup is to try and figure out how to make money in real estate easier and quicker than those original methods. One concept that holds true today is that a distressed property will be valued less than just the cost of repair. My suggestion is to interview rehabers and appraisers to try and quantify that concept.

Many first time novices approach the sweat equity project because of either lack of knowledge or lack of money. They mistakenly believe that they have more time than money and can turn it in to profit. The real breakthrough comes when the additional knowledge reveals that their time becomes more valuable than the time spent actually doing the work themselves.