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OPM - The Art of Leveraging
Equity lender, hard money lender, private investor or what ever term one uses can be a great source of funds to do real estate transactions and the question of how to find them comes up often! There are numerous ways to do this, and no two investors are exactly alike, so it's important to be innovative and customize your proposal to the specific "hot buttons" for each funding source. One of the greatest advantages of real estate investing is the power of leveraging other people's money. When a property appreciates, it will appreciate on the value not on the original investment. Therefore, if you 'leverage' the property with "OPM". You can make an investment even more valuable by having the property rented out. The monthly mortgage payment is being paid by the renter and someone else is paying for your equity growth in the property. "Money is a terrible master but an excellent servant." - P.T. Barnum The best source of cash for your real estate business is other people's money. Perhaps one of the greatest "secrets" of the richest people in the world is summed up in those three words: Other People's Money - OPM for short. The majority of most successful people launched their fortunes using OPM. Your goal is to not use your own cash. The most successful real estate investor tends to use OPM (Other People's Money). Keep this in mind as you start to invest. Hold out for the limited money down or no money down deal rather than tying up a ton of money in one property. Leverage, terms and long loans can be great friends. Keep these principals in mind: *Leverage is simply controlling a lot of real estate with little or none of your own money. The more the better. *You should attempt to get the maximum loan to funding possible with each property. *The best loans have fixed interest rates and are assumable without qualifying. *Keep your equity as low as possible so you can keep more cash available for investing. You can find "OPM" by writing to various lenders asking them if they would be interested in your real estate loan. By calling lenders in your area who might be interested in lending on your real estate proposal. By visiting in person lenders whom you think would be willing to help you. By looking on the Internet for real estate lenders who might work with you on the deals you have. By reading the Real Estate Section of your local large-city Sunday newspaper, looking for ads run by lenders in your area. Find properties that has been sold in the past few months by searching the public records at the county recorder's office. Find property that sold to real estate investors by banks, credit unions, HUD, VA, FNMA, or any other major source and if the buyer is not an individual but say a corporation or partnership you have most likely bagged an investor. The deeds should give the mailing address of the new buyer. Send them out a letter and tell them about your ability to locate real estate or better yet give them a call if listed. Any one who has money could be a source of funds for your real estate purchases such as Doctors. Another great source is checking your recorders office again looking for individuals who holds mortgages on property. This has provided me a great source for hard money loans. Retirement plans are a great source of real estate investment funds. Many people don't even know they can use their retirement plans funds to invest in real estate, mortgages and trust deeds. Many, once they stash it away, forget they even have money in a retirement account. Many investors think that money (or lack of money) is what stops them from closing a deal. This is not true it is a myth that holds some investors back. Understand that money is NEVER an issue - IF the deal is right, the money will come. Simply think creatively, go to the source of funds and simply ask for money. The worst that can happen is you get a "NO". Each no only places you closer to a "YES". To your success, Copyright 2005 JMichael Investments About the Author: John Michael is an active Real Estate Investor - Author - Speaker - REI CoachVisit my Real Estate Investing Site at: http://jmichaelrei.com FREE REI Club Site at: http://stealth.thecreativeinvestor.com
MORE RESOURCES: Landmark Settlement Breaks Up the Real Estate Cartel The American Prospect Top real-estate CEO sees decades of housing pain ahead: 'What the Fed did will have a 30-year tail on it' Yahoo Finance Commercial Real Estate's Systemic Threat: Separating Fact From Fiction Commercial Observer Rules that helped set real estate agent commissions are changing. Here's what you need to know The Associated Press Who are real estate lobbyists talking to in New York? City & State New York Brockton-area real estate sales for Dec. 26 to Dec. 29, 2023. Enterprise News Refined Real Estate: Historic Queen Anne Polson House lists for $6,950,000 seattlerefined.com Pension funds snap up real estate at steep discounts Financial Times Luxury's Latest Battleground: Real Estate | BoF The Business of Fashion The Realtors' Big Defeat The New York Times Investigation underway after 44-year-old real estate investor seen on video firing shots off boat docked at Lakeview ... WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale Will March bring more madness to Craven County's real estate market? New Bern Sun Journal A luxury agent on how the NAR settlement will change his business The Washington Post Rules that helped set real estate agent commissions are changing. Here's what you need to know Lufkin Daily News Cities Face Cutbacks as Commercial Real Estate Prices Tumble The New York Times Rules that helped set real estate agent commissions are changing. Here's what you need to know KXLY Spokane What National Association of Realtors agreement means for Texas real estate KAMR - MyHighPlains.com Realtor group will pay $418M to settle commission lawsuits The Associated Press Israeli real estate event: Legal complaints escalate NorthJersey.com National lawsuit could shakeup housing market, cut into real estate agent commission 11Alive.com WXIA Realtors settlement to lower home sale costs, alter commission structure The Washington Post Swimmo Invest Opens up a New Chapter in the Real Estate Industry Markets Insider What Seattle-area homebuyers should expect after national settlement The Seattle Times CrewBaltimore’s mission to accelerate women’s success in real estate Afro American Newspaper Realtors Reckon With a Seismic Shift to How They Get Paid The Wall Street Journal China's Real-Estate Market Just Set a Record—but Not a Good One The Wall Street Journal Settlement will affect Iowa homebuyers KCCI Des Moines What the death of the 6% real estate commission means in D-FW The Dallas Morning News Real estate commissions, unassailable for decades, could crumble after landmark settlement The Denver Post Is the Era of the Celebrity Real Estate Agent Over? Industry Reacts to Settlement That Could Slash Commissions Hollywood Reporter Making Sense of New York's Confusing Luxury Home Market The Wall Street Journal National Association of Realtors Agrees to Slash Commissions to Settle Lawsuits - The New York Times Rules that helped set real estate agent commissions are changing. Here's what you need to know Northeast Mississippi Daily Journal A commission settlement may affect housing market 9News.com KUSA Illinois real estate: Home sales in Peoria, Tazewell, Woodford counties Peoria Journal Star Bay Area Real Estate Executive Charged with Wire Fraud, Identity Theft in Investment Scam - Hoodline Foreclosures Are Rising—Especially in This One State—but Not for the Reason You Might Think - SFGATE Realtors Reach Settlement That Will Change How Americans Buy and Sell Homes The Wall Street Journal Rules that helped set real estate agent commissions are changing. Here's what you need to know KOB 4 Real estate lawsuit settlement upends decades-long policies that helped set agent commissions WQAD Moline Once America's Hottest Housing Market, Austin Is Running in Reverse The Wall Street Journal End of 6% real estate commissions could mean lower home prices The Atlanta Journal Constitution Real Estate Credit Investments (LON:RECI) Shares Pass Below 200 Day Moving Average of $126.75 Defense World A Look Into the Future of Home Buyers' Agent Commissions The Wall Street Journal Manhattan Real Estate Update westsiderag.com Granite Real Estate Investment Trust (TSE:GRT.UN) Given Consensus Recommendation of “Buy” by Brokerages Defense World National Association of Realtors to cut commissions to settle lawsuits. Here's the financial impact. CBS News Bridgemarq Real Estate Services (TSE:BRE) Share Price Passes Above Two Hundred Day Moving Average of $12.93 Defense World Blackstone, World's Top Alternative Asset Manager, Eyes Record Highs Amid Real Estate Bottom Investor's Business Daily Chicago Voters Face Choice on Tax to Fund Homeless Programs The New York Times 4 Ways a Settlement Could Change the Housing Industry The New York Times Colony Ridge violated deceptive trade practices, Texas says The Texas Tribune Real Estate Stocks Drop As NAR Agrees to $418 Million Settlement Markets Insider |
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