How can I buy a waterfront home? - Posted by David MacGown-MI

Posted by David Krulac on December 10, 2007 at 15:09:46:

I’m obviously not a typical seller, or buyer as I’ve sold and bought property every year for the last 4 decades. It doesn’t matter to me if the market is up, down or sideways, there are still buying opportunities and there are still selling opportunities. Sold one today (Mon0 and bought one on Sat. And if I have something for sale and it doesn’t sell, I’ll just wait until it does, no panic here.

How can I buy a waterfront home? - Posted by David MacGown-MI

Posted by David MacGown-MI on December 09, 2007 at 23:09:30:

Hello Creo gang,

As you all know the Michigan market is in the tank, so this is the best time to be a buyer. My niche is wholesaling but am educated in other creative buying/selling strategies. This is the thing, I can’t afford to buy a waterfront property to live in, but I don’t want to miss out on the best buying opportunity of my life. I would like to buy luxary/waterfront for my personal residence not when I can afford it, but when the market is at the very bottom. I figure as bad as the market is, you would not have a million $ home listed on the mls unless you are desperate, right?

So…If my exit strategy is to keep the property to live in
what would be the best method for buying? (keep in mind the property is listed on the mls)

A) discount cash offer using a hard money loan then refi

B) subject to

C) lease option

D) option

E) short sale

f) subordination or substitution of collateral


If any of you have any other ideas for creative purchases please let me know. But what is the BEST way to buy?

Keep in mind that there is no way I can afford a house like this… but if I put my back against the wall it will help me to think out of the box and become more creative, which can only help me with future deals.

In rich dad poor dad, Robert K. told a story when he was a child…Robert and his rich dad (well before he was rich) were walking on the beach and rich dad pointed out a couple of beach front homes that he owned and Robert was amazed and asked “how can you afford to buy those houses”?!
rich dad responded…“I… can’t afford to buy those houses…but my business can.”


Re: How can I buy a waterfront home? - Posted by David MacGown-MI

Posted by David MacGown-MI on December 10, 2007 at 21:35:31:

Hello all,
This is the best game plan I have come up with based on an actual property I found in the MLS, let me know what you think.

The house is vacant, owners live in Florida (another waterfront home)

Buy on a lease option and go to to find qualified roomates to help with lease.

With housemates, my lease payment would be aquivalent to that of a nice apartment only I would be living in a luxury waterfront home, the ultimate bachelor pad…I am single after all:)


Don’t be a motivated buyer - Posted by Penny

Posted by Penny on December 10, 2007 at 19:08:00:

You’ve had lots of good comments & advice, so I’ll try not to repeat anything.

Two additional comments. One - buy your waterfront home AFTER you have reached success. If you buy it too soon, you can easily jeapardize your business progress because your large house payment will likely take away from reinvesting the profits. Once you do have money in the bank, you may think much differently about whether you really want to spend that hard earned dough and what kind of a big house you really do want.

Two - don’t have a scarcity mentality. There will always be good deals so don’t try to force one that won’t be a good deal even with creative financing. Affluent folks have different motivations than the masses, so the “best” way is to understand the motivation of the individual seller in order to choose the best deal structure. You also need to be financially positioned to have this flexibility, which is where 1) comes in.

That’s my $.02, not adjusted for inflation.

Best wishes!

Re: How can I buy a waterfront home? - Posted by Rich-CA

Posted by Rich-CA on December 10, 2007 at 17:27:44:

Be wary following the stories in Rich Dad as though they were true. One author researched and found no evidence there was anyone matching the book’s description of “rich dad” where Kiyosaki “remembers” him being. The story and event are fabrications. It might teach a lesson if it were true.

Now for the businessman who owns his own business, there is no substantive difference between he personally and his business being able to own something because how much he pays himself is his decision and increasing that pay can move the ability to buy the asset from the business to the personal side of the divide.

Rookies rarely hit home runs - Posted by gerald(tx)

Posted by gerald(tx) on December 10, 2007 at 13:08:02:

It’s pretty obvious from your questions that you have very little experience in real estate investing.

But you present us with a hypothetical example involving a million dollar property without a clue as to how you would tackle it. And you keep quoting all these inspirational books you have read. It’s nice to dream, but after the sunshine has been pumped up your rear end, it’s time to board the reality train.

And reality is - very rarely does a rookie hit a home run the way the gurus and motivationalists would lead you to believe. The halls of REI failure are littered with the ghosts of wannabees looking for the home run right out of the chute.

Nearly all of us who made it started off with a small deal, only a few thousand profit, then kept increasing our profits as our knowledge and experience increased.


Re: How can I buy a waterfront home? - Posted by Dave T

Posted by Dave T on December 10, 2007 at 07:18:36:


I wonder if you have examined your motives. Why do you want a million $ home with the expensive upkeep, property taxes, and insurance that goes with it?

Maybe you believe that successful people live in these expensive properties, so when you are successful you need to move up too. If this is your thinking, then why would you need that?

Go the the library and check out “The Millionaire Next Door”. The message of this book is to live below your means and invest for the future. Conspicuous consumption keeps you broke.

What is that saying about ASSUME(ptions) - Posted by JT-IN

Posted by JT-IN on December 10, 2007 at 06:33:11:

  1. “the best buying opportunity of my life”

  2. “when the market is at the very bottom”

  3. “million $ home listed on the mls unless you are desperate”

  4. “if I put my back against the wall it will help me to think out of the box and become more creative which can only help me with future deals.”

The above all are assumptions, that with the right time and place, may become reality; OR NOT.

  1. Next month will likely be the best buying opp or your life, followed by the following month, and don’t forget about the month after that either. My assessment is you haven’t yet seen the BEST buying opp of your life, as it is NOT here yet.

  2. I would question whether we are near the bottom, so what you need to do is to continue to move yourself to a position of ability to make such a purchase, while being observant and patient enough to KNOW when the “bottom” is near. When you gain the proper wisdom and ability to strike, you may prove yourself wrong about your ability to be able to afford such a home.

  3. Not necessarily. Economics for many of these folks is different than it is for the masses, in many cases. If you study the income divide at all, those at the upper income limits are making significant more than they were just a few years ago.

  4. Timing is everything… again, and still. NOW may not be the time to “put your back against the wall”. I hear that the cement is harder than ever today… and such an impact could be financially fatal.

More study is needed of the topic, IMO. Patience is what is required in such markets, as you cannot force a great deal. You should only buy such a property under terms of a “great deal”, which might be 50% of FMV. Something that you cannot walk away from, then pull the trigger.

DO NOT let your personal wants and needs enter into your business decisions. All too many folks who enter this business, want to go out and make personal purchases when they see a good/great deal. This is the prescription to the bottom, if you ask me. Learn how to subdue the optical nerve that allows you to look at a RE deal with YOU as the owner occupant. This will go a long way toward keeping you well in this business.


Re: How can I buy a waterfront home? - Posted by David Krulac

Posted by David Krulac on December 10, 2007 at 05:43:11:

People list million $ homes all the time, god times and bad, wheteher they are desperate or not.

If it were me:

  1. I’d bve prepared for the long haul, it could take a long time to find what you’re looking for, maybe years.

  2. nobody knows how long the market will be soft, we may be at the beginning of a multi-year down turn. Next year or the year after could be even better times to buy.

  3. Know your market, know what market values are, know every property for sale, and know if its a value r not.

  4. Know the players, the owners, the realtors, and others in that market.

  5. Look for a property the needs work, may be as little as out of date, or as much as needs everything. A property that turns off other buyers , may be your ticket into the market.

  6. you’re going to ned owner financing, without getting qualified. You need a seller that doesn’t need the money, but just wants to sell for other than monetary reasons.

  7. Befriending a seller and getting a seller to like you will go a long way to getting a better deal from a seller. Antagonizing the seller or trying to beat the seller down in negotiations may be counter productive. You want an ally not an adversary to do what you want to do.

PS I have 18 wooded acres with 2000 feet of waterfront.

Re: How can I buy a waterfront home? - Posted by george

Posted by george on December 10, 2007 at 01:53:46:

Years ago I worked as a salesman for a luxury automobile dealership. I got a late call from a seemingly sincere person, I waited on an after hours appointment for this customer.

Turns out he was a 19 yr old kid who had gotten in Amway. He was told to not just visualize his dreams, but to go see and touch it.

You remind me of the Amway kid. Million dollar home owners are rarely desperate and none of your buying methods could probably apply.

Run that idea past your… - Posted by JT-IN

Posted by JT-IN on December 11, 2007 at 14:35:38:

Ins Agent… See how the Ins Co likes that idea…?

Potential Neighbors… My guess is they won’t like it any better than the Ins Co will… and I would bet there are zoning issues too, so IF you did such a thing, the complaints would mount quickly. Get the drift…?

Place yourself in the neighbors shoes, one who CAN afford to live there today, and that is part of the reason they choose to do so. To avoid the hassle of having a bunch of “hey you’s” living in their midst. If you were them, you wouldn’t go for it any more than they would.

This idea also shows that you simply aren’t “there” yet… When you get “there” you will not need a map to recognize what the town of “there” looks like.

See you “there”.


Re: How can I buy a waterfront home? - Posted by David MacGown-MI

Posted by David MacGown-MI on December 10, 2007 at 07:39:42:

David, I have read that book several times and while I think it makes many good points on frugality it also borders on being cheap. Most of the millionaires surveyed for that book have a net worth of less than 5 million. Which can be attained by most people by investing in mutual funds and ira’s. I like the millionaire mind better because they surveyed decamillionaire entrepreneurs. I am an entrepreneur and tend to be flashy and over the top, most likely because of my ENTP personality type.

I liked Rich dad poor dad’s message better…“Don’t live below your means, expand your means!”

I want to enjoy the fruits of my success, I am certainly more offense minded rather than defence minded so I guess I will never make the forbes 400, but then again what good is it to have Warren Buffet money if you are as cheap as Warren Buffett.

Richard Branson is MY hero:) Well, Donald Trump is a close second. LOL


Re: What is that saying about ASSUME(ptions) - Posted by David MacGown-MI

Posted by David MacGown-MI on December 10, 2007 at 07:01:57:

Thanks for your input JT…your right, cement is pretty hard. I’ve hit my head against the wall a few times in this business. I do need more patience.


Re: How can I buy a waterfront home? - Posted by David MacGown-MI

Posted by David MacGown-MI on December 10, 2007 at 07:19:37:

David, I would guess that you wouldn’t consider putting your 18 acres on the market today unless absolutely necessary, maybe an act of desperation.:slight_smile:

If I have learned anything I need to learn to be more patient because the worst may be yet to come and time is on my side.

Thanks for your input,

Re: How can I buy a waterfront home? - Posted by David MacGown-MI

Posted by David MacGown-MI on December 10, 2007 at 04:37:32:


Why comment if you can’t add anything of value?

I read an article about Britney spears. She makes $700,000 a month and spends it when the money comes in, so she’s not saving or investing anything. What happens when/if her income drops considerably (which has happened to many real estate proffessionals) and she still continues to live the same lifestyle?

Million dollar home owners can and do become desperate to sell, just not as often because there isn’t as many. Think about it, why would you sell your house at the bottom of the market unless you absolutely really had to?

Now I am reallistic about certain things and normally I wouldn’t think about buying a luxary property until I am certain I can afford it but in this case there may never be a better time in my life to aquire a bargain waterfront property. In fact there’s never been a better time in all my life! (I’m 37 BTW) I’m thinking of value vs affordability.

Generally I will not think about buying a property unless I have a clearly defined exit strategy…as a wholesaler that is to quickly sell to another investor, but in this case I want to live in the property. How can I afford to make this happen? (Thinking out loud)

By the way visualization works for about a minute, but then you have to get off the pot.
By asking myself how I can afford it gets me to start thinking…that is what motivates me… the visualization of not making payments and losing the house and ending up on the streets and eating out of a garbage pan (how’s that for visualization) that’s what motivates me to make more money and increase my business.

Now I am sure at least one of the ideas I came up with is a very good way to buy as long as it solves the sellers dilema, but my real question is…if you had 5 or 6 properties and all of the owners were motivated… and each one all had a problem that could be solved in 5 or 6 different ways which way would work best if your exit strategy was to make the property your personal residence?

Thank you,

Re: How can I buy a waterfront home? - Posted by Rich-CA

Posted by Rich-CA on December 10, 2007 at 17:24:50:

You definitely sound like a Kiyosaki follower rather than a business person.

It might be beneficial, though I doubt you would, to look into how Sam Walton (richest man in the world until he died, and his children are still in the top 100) lived. He lived in the same area he did when he had a single 5 and dime store after he became the world’s wealthiest man. His family still live in the same area. Wealth has not changed who they are because they were these people before wealth came to their doorsteps. This man is the epitome of the “millionaire next door” and bears almost no resemblance to the thought patterns and lifestyle of a Kiyosaki groupie.

Re: How can I buy a waterfront home? - Posted by Eric in FL

Posted by Eric in FL on December 10, 2007 at 13:16:36:

Why not ask to be a caretaker of the property and while you have built a great relationship through hard work ask for an option on half the appreciation if they were to sell. You would be living in a huge house, which I think is more of a pain in the butt then anything, and you have an ownership stake for nothing. I think part of the point you are missing is that you want to look wealthy and you are not. No offense but that is a fatal flaw that will be your downfall. If you care about looking wealthy then you are missing out on what real deca millionaires are all about. If you look at these people like Richard Branson and Donald Tump they could care less that you think they are wealthy. They are pitch men for the brand and their brand demands over the top excessiveness and notariety. I could line up 10 billionaires and you would have no idea who they are and they are definitely investors. I can also line up another 10 that have visual recognition by design to pitch their brand. Do you care more about being wealthy or your friends thinking you might be wealthy? I think I know the answer.

Best Regards,

Re: How can I buy a waterfront home? - Posted by David Krulac

Posted by David Krulac on December 10, 2007 at 10:06:55:

My property will be for sale very shortly and it has nothing to do with any desperation.

Over the summer we had a 6 acre parcel with a 200 year old house on it and 1700 feet of water frontage. It was sold for $500,000 CASH, and the buyer immdeiately tore down the house and barn. so they essentially paid $500,000 for 6 acres raw land, with no public water or sewer.

Re: How can I buy a waterfront home? - Posted by Sailor

Posted by Sailor on December 10, 2007 at 07:41:29:

Folks put waterfront property on the mkt every day for reasons other than desperation. Families & needs change. I’ve loved living on the water, but my next house w/be landlocked.


Re: How can I buy a waterfront home? - Posted by Rich-CA

Posted by Rich-CA on December 10, 2007 at 16:40:10:

His comment was valuable, just not what you wanted to hear. Many useful and true answers are ignored by those whose preconceptions don’t match what they are told.