Dean has written yet another lukewarm book on real estate investing. The only part about it that I liked is the marketing, which only applies to single family residential property. If you are looking at commercial or multifamily investing, then forget about it. His "all new" technique for profit is simply find an end-buyer (without violating real estate broker licensing laws) and find a motivated seller, then put the two together.
You get the seller's house under contract, which is an "equitable interest" in the property. That legally allows you to market your interest in the contract. Find a buyer, but don't assign your contract to your buyer! No No! That would be too easy! He claims that banks and other institutional lenders don't like their borrowers to buy property with an assigned contract. What nonsense! A contract is a contract. As long as the contract clearly spells out the terms and conditions of the transaction, then it's good to go.
Instead, you get the seller to sign yet another contract that effectively cancels your senior contract with the seller and requires the seller to pay your profit to you at the closing with the end-buyer (who agrees to enter into a back-up purchase contract with the seller). When your senior contract is cancelled, then the end-buyer's back-up contract becomes senior and effective. Then you send your "cancellation contract" (which looks suspiciously like an invoice) to the closing agent (title company, escrow company, closing attorney) as an effective modification of the closing instructions so that the closing agent will write a check to you at the closing for your profit. Of course, your contract with the end-buyer must have a provision allowing you (as a 3rd party service provider) to modify the closing instructions between the seller and the buyer, because you're no longer a principal party to *their* contract! Are you confused yet? That is way too complex!
There are much easier techniques that work with institutional lenders, that don't break the title chain and are clearly itemized on the HUD-1 settlement statement so that your profit is legitimate and compliant with RESPA law. These techniques include ordinary purchase contract assignment and option contracts (
How to Make Money With Real Estate Options: Low-Cost, Low-Risk, High-Profit Strategies for Controlling Undervalued Property....Without the Burdens of Ownership!).
Recent temporary changes in FHA rules allow wholesale (short) title seasoning for fix-and-flip transactions. So, his jumping through several hoops to maintain the title chain are useless. Just use a double close with transactional funding from a hard money lender, and then close with the end-buyer. Take your profit check to the bank and do it all over again. Or just assign your purchase contract to the end-buyer for enough money to cover your earnest money deposit plus part of your profit. Then collect the remainder of your profit at the closing as a 3rd party service provider (perfectly legitimate on the HUD-1).
Dean also doesn't realize that either party can assign the contract. You, as the selling party (contingent on delivery of deed and marketable title), can assign your contract with the end-buyer to the property owner for an assignment fee. Then the owner (seller) closes with the end-buyer and pays the remainder of your assignment fee, if any. The contract with the end-buyer would already include an assignment provision for receiving your fee at closing.
Dean spends way too much time on the benefits of real estate and the wealth that intelligently educated investing can create. Folks who buy the book are most likely already aware that the vast majority of wealth created by society is rooted in real estate. Get to the point and tell us HOW to do it, instead of WHY to do it! We already know why real estate investing is the road to financial freedom. Show us some case studies, with step-by-step actions and numbers. Folks need to see an easy, repeatable, understandable process that they can quickly grasp and put into action.
This book has some good information on marketing single family houses for beginners. You can forget just about everything else in it.
