Meet John, he works at a call center for local cable company in Florida. He wants to aggressively build wealth through real estate but can’t afford a down payment on his first investment property. His goal is to buy a duplex and live in one side and lease the other to cover his mortgage and start acquiring cash flow properties.

He knows there are lots of foreclosures in Florida and decides to become a wholesaler working with out-of-state investors. He has nights and weekends to locate deals and is tech savvy to build a Web site offering deals he finds. He locates a single-family home foreclosure for $65,000 and buys it paying a $1,500 non-refundable deposit. He has 30 days to find a buyer and through his Web site that he built a few months back has talked to a handful of investors looking for a good deal. He puts together an investor pack of home price comparisons, local rental rates, photos, and an estimate for repairs needed by working with a local contractor. He creates a pro-forma return based on an investor buying the place and spending $14,000 in renovation. With the expected rents it could produce a 10% cap rate and be worth around $95,000.

He finds an investor to buy his home for $70,000 with a $3,500 commission for him and some closing fees and gets his $1,500 deposit returned. The investor closes for all cash in 15 days with the following proposal: