Low Equity Dispositions Quiz

Which of the following is NOT a valid exit strategy for a low equity acquisition? *

Flip

Lease

Lease Option

Wrap-around Installment Lease

Installment Land Contract

Short-Term rental

When you are doing a "lease sandwich" and your tenant is paying above market rates, who is your most likely client from the list below? *

Rich people with money to burn.

Dumb people who don't know what the price ought to be.

People in a hurry.

People with decent income and cash, but challenges or marks on their credit.

If you do a "no equity" deal, what's one thing you need to be sure you have? *

Cash Reserves

Extra furniture you can put into the house

A good banker

A stunning motorcycle you can sell quickly if you need the cash.

What can you do with a property that has no equity and will not cash flow? Check all that are good ideas. *

Tell the seller to hang on until the prices come up a bit.

Lease out to credit-challenged buyer. Make money on the down-payment.

Invest in furniture and turn the property into a short-term rental.

Buy for what they owe on it and sell for a higher than market price to a cash purchaser.

What does the phrase "no flow" mean? *

Getting insurance from Progressive is out of the question.

The water has been turned off.

The property is on a well powered by an electric motor and the power is off.

The fair market rent is the same or less than the mortgage payment.

Um, that’s Flo, not Flow. But thanks for playing! We are going to make money here either with a credit challenged client or short term rental.

In which of these situations would a lease sandwich NOT work? *

Seller has no equity but it cash flows.

Seller has high equity.

Seller has no equity and it does NOT cash flow.

At a real estate auction.

Which of the following is NOT one of the risks of the Short Term Rental Strategy? *

Increased costs with furnishings

Local laws could change, banning short term rentals in your area.

You have to continually market, rent, clean, and set up the property.

None of the above.

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