"NO ONE ACTUALLYWANTS CASH. THEYWANTWHAT CASH CAN BUY THEM."
that can be used to structure deals that a seller will find more attractive than cash. And for someone thinking of selling your property, you should be considering what your next investment is and what characteristics it should have. Get that directly rather than in two or more steps through cash, and you will speed your investing and reduce your transaction costs. Let’s look at some examples. A property owner selling their apartment complex that she has managed herself for 30 years wants to simplify her estate: she has three kids who don’t get along and won’t be able to agree on how to manage or even sell the property if she leaves it to them. What does this seller really want? An income stream that can easily be divided three ways with no need for cooperation from her children. How could you structure a deal with this seller other than cash?
this alternative, you create a life insurance policy against the seller for part of the sale. The remaining purchase price is paid from the insurance upon the seller’s death. This benefit can, of course, be divided into three parts easily by the executor of the seller’s will or could be placed into trust for the children. That’s just one example of a situation where the seller might prefer an alternative to a cash sale. In every seller situation there is probably some approach that would be more beneficial to the seller than cash. It’s up to you to find it. It will require getting to know, and frankly care about, the seller and her objectives. But it’s worth it to make a deal that you both can prefer to the standard, cookie-cutter, cash or cash-plus-bank-loan sale. •
While cash may be the emperor, it has no clothes. Those who see clearly the risks of holding cash will want other assets instead. They see that cash is not something to hoard but something to move through as quickly as possible to something they really want. No one actually wants cash. They want what cash can buy them. Of course, since dollars are fungible (they are all the same) and liquid (they can be traded for anything) cash is the next best thing to what they really want. What does this tell you about how to creatively structure deals? Instead of offering your seller the next best thing (cash) offer them the best thing — what they really want. This type of thinking opens all kinds of possibilities
Here are a few options:
Steve Streetman, president of StreetSmart Investments, LLC, a commercial real estate investing company, is an avid cryptocurrency investor and has worked in cryptography and high-end computer
• Create a seller note that divides the payments into three separate payments that can be individually directed as the seller desires. If the seller trusts you, this approach would work just fine. • Give the seller an annuity as part of the sale where a third party will provide an income stream to the seller and later to her heirs after the seller’s death.
modeling for over 30 years. He teaches commercial real estate investment courses and is a real estate agent with RealInvestors Real Estate Services. His book “Cryptocurrency and Real Estate: How Bitcoin and BlockchainWill TransformReal Estate Investing” is anticipated to release early 2020. To find out more about exchanging or exchangors, you can visit the NCE website, readWayne Palmer’s chapters in Robert Kiyosaki’s “The Real Book of Real Estate,” or contact Steve. Readers who are real estate licensees in the mid-Atlantic area who might be interested in joining a local exchange group should contact Steve via email or LinkedIn.
• Use a viatical settlement. In
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