Turn fact to fiction. Listen to conversations on the street, stories from friends, articles in the newspaper. Watch out for scenes in your daily life that strike you on some level. Then exaggerate and distort the facts of what you have seen and heard. Change at least one element of a real event, such as the setting or a conflict.
Jump off from a point in history. Take a biblical story and expand on it. Rearrange the elements of a historical event, and make the story happen in a different time period. Choose a historical figure and write from the vantage point of that person's spouse. Or choose someone from the historical figure's background, like the cook or the doctor, and write about conflicts in their lives.
Tap into your dreams. Oftentimes, you may be able to pull out a theme for a story from a dream. Other times, the entire story, complete with settings, characters, and conflicts appear. Our dreams are rich with material for writing unbelievable stories. Keep a notebook by your bed, and jot down images, words, and people from your dreams. Turn these scenes and characters into fictional stories.
Use your own life as fodder for stories. They say that writers should write what they know, and your life is full of the seeds for stories. You don't have to write an autobiographical story; use your life experiences as jumping off points for fictional stories. Again, change details, and fill the story with altered facts.
Use your ancestors for story seeds. Pick an ancestor, research his or her life story, and then write about what his or her life was like. Maxine Hong Kingston has written many stories that are fictional accounts of her ancestors. Alex Haley, author of "Roots", also used his ancestral stories to create unbelievable stories.