Increase Real Estate Profits - Getting Free Stuff

Brought to you by "The Simple Man's Guide to Real Estate"

In any real estate transaction, profits can be made from items other than the building and the land. As a buyer, you are in a position to negotiate for "extras". Your purchase agreement should include these extras. If the seller accepts, you own these items. If not, you can "trade" back these extras in exchange for better terms or a lower price. We refer to these extras as "the cookies at the party".

For example, when I offer to buy a property with a large yard and the owner has a lawnmower (perhaps even a riding model) I write into the agreement that the mower is included in the purchase. I tell the seller that it will be needed to take care of the yard. I will also try to get furnishings, other tools and equipment, or anything that may be collecting dust in the attic, garage or barn. I have seen times when I was able to get some valuable antiques that the owner thought was just junk. I once got this 1980 Porsche thrown in. In another instance, an abandoned 1964 Mustang sitting in the barn was included. Have you priced one of these lately? The owner just didn't know its value.

Always ask for such things. You may not get them, but perhaps you will. Even if you don't, do not give them up without getting something else in return, such as the seller paying the closing costs, or doing certain repairs before closing. Either way, you come out ahead.

All of these items can be sold for a tidy "extra" profit. It is not unusual to earn an extra $3000 or more in this manner, all from a single transaction. Of course, if you resell the real estate, be sure to exclude these items from your sales agreement.

Oh, and if the property you are selling has an old barn? Exclude that from the sales agreement, too, if you can. Not the land it is on - just the barn. Take it down and sell the boards and beams - old lumber and timbers command a high price on the open market.

The point is, as you inspect the premises keep your eyes open for any possible "freebies" to include in the purchase agreement. Even if you do not get them, you should be able to take them out of the purchase agreement in exchange for concessions on the price or terms, which also increases profits.

Bear in mind that many of our techniques will increase your tax liability due to these extra profits. To reduce your taxes, you can give these items away to charity and write off their full value, thereby reducing your taxes, rather than sell at half-value (which adds to your income - and your taxes!)