Thanks for visiting this blog. As promised, I’m going to tell you a “One Deal / No Money Down Millionaire” story. First. I’m going to preface it with a short background story. To answer the question if it is possible to become a millionaire on one single deal with no money invested, the answer is yes. The big question is will you position yourself for such a deal?
I would say that doing a million dollar deal of any kind as your first deal is probably un-likely. Very few of us have the kind of knowledge or experience to make a deal like this possible without doing smaller ones first. Then, even before that, there must be a willingness to step out on a limb to do a few of those smaller deals. But after a little experience, some knowledge how it all works and some guts to step out and do some successful real estate deals, Yes you can do one single deal that is enough to make you a millionaire.
Here’s My One Deal Millionaire Story
My Goal: Purchase a resort property suitable for the development of a Treehouse Resort
Subject Property: 45 acre campground close to a vacation destination with an asking price of $1.5 million
Existing Income: $250,000 per year income, $175 per year expenses (Net income – $75,000)
Cash Flow: The Existing property was making about $75k per year as a campground and RV park.
The Set Up
This property and business was worth over a million dollars and it earned about $75,000 per year by doing nothing new, just running it the way it was. All of the necessary equipment, infrastructure and staff were already in place to keep it going without any additional activity by new owners (other that overseeing the operations)
After negotiating the price to $1.2 million, we also negotiated with the seller to carry a full 25% of the purchase price as a second mortgage for the down payment. (no money down) We negotiated with the bank to roll all closing costs and fees into the primary loan to be paid out of the closing proceeds. (no money out-of-pocket) Our closing date was early in the camping season so there were about $35,000 in advanced reservation being held by the seller that would transfer to the buyer at closing.
By using just a few R.E. Investor techniques, we purchased a $1.2 million property and business using no cash. We walked out of the closing with over $8,000 in extra cash from closing. We inherited an automatic annual cash flow if $75,000 and a property that will be paid off out of business income proceeds in 20 years. Did it make us millionaires overnight? No, but it did guarantee that if we simply ran the business effectively, we had created a future millionaire result for ourselves in one “no money down” deal.
A deal like this does not make someone a millionaire overnight. In fact it doesn’t necessarily change much of anything immediately. What it does is create an environment where the income from an existing business asset puts you on an inevitable course towards becoming a millionaire. I like to refer to it as putting an income producing asset in a pipeline that will deliver cash out the other end for years to come. Eventually, the business (property) will be paid off and will generate even more cash as a “no debt” asset. A deal like that will ultimately make the owner a millionaire.
So why the whole big story
And more importantly, what does it mean for you? In 2004, I reached a point where I was fed up with the paycheck to paycheck life and decided to do something about it. Since we’ve experienced success with real estate investing and business ownership, I’ve decided to share some of what we’ve learned along the way. If you found this by subscribing to my “Investips” daily email, then you will receive some of what got me from broke to millionaire. I hope you find some value in it.
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