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Real Estate Information |
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Finance Your Real Estate Investment Properties
Unlike traditional residential real estate mortgages, real estate investment financing is way more creative and offers more options than you think. The golden rule in real estate investment is OPM (Other People's Money). I have enough money; shouldn't I buy my real estate investment for cash? No, I absolutely advice against investing large sums of cash into a single real estate investment. There are two reasons why not. First, you give away most of your profits by not leveraging your real estate investment. Second, it is far too risky to put every egg into one basket. Let me explain the leverage issue for a moment. I will give you an example of a $100,000 investment property that typically increases its value (appreciates) by 7% average a year. Maybe more, maybe less depending where you live. Paying all cash for this property will yield in a 7% appreciation profit plus the net profit from renting the place. Now you're looking at roughly 15% of returns. If you're conservative with your investments you might be satisfied with this kind of a return. These days you might get equal or better returns with other conservative investments minus the hassle of being a landlord. But you don't mind being a landlord, because you understand and utilize the leveraging method with financing your real estate investment. With the example above you will make roughly $15,000 a year in profits from your investment. Now let's take a closer look at what leveraging can do for you. Today a typical real estate investor can get financing as high as 95% - 97% of the purchase price. Occasionally 100% financing is available as well. But this would be totally unfair in this example to compare this with all cash purchasing. 15% return sounds like a lot, but wait till you see this. Let's assume that the rental income will cover all your expenses including the mortgage payments. Taking the same example from before your net return would be the 7% appreciation profits of your property. This would translate into a $7,000 a year profit. With a 95% financing in place you would get $7,000 return on $5,000 (your 5% down payment) invested. This is a whopping 140% return on investment. With the same $100,000 you can go out there and get 20 investment properties, finance 95% of it and make an amazing $140,000 profit a year. This beats the projected $15,000 profits with an all cash transaction any day. Of course you will have a lot of trouble to get financing for 20 properties in a single year. Typically 5-6 new rental property mortgages are the maximum lenders will allow these days. This is the signal to get creative with your financing structures. In this case sellers financing would be your key to achieve your goal of maximum leverage of your investment dollars. Despite the message from all these late night infomercials, seller financing is harder to get than they want you to make believe it is. It all depends on the seller's ability to offer seller financing and the seller's motivation. Only about 1 out of 20 properties for sale are able to get seller financing. That means that there's no mortgage balance on the property. From this narrow selection the seller must be motivated to sell under these conditions. This could be tax reasons, time constraints, personal reasons and many more. As you can see this translates into a lot of work to achieve your goals. But let me tell you one thing. This separates the tire kicker real estate investors from the real go-getters. Wouldn't you agree that a little bit of hard work and determination is well worth it to build a real estate empire? I think it is well worth the trouble and hard work. At the end of the day you keep building your real estate investment portfolio and sooner than later you will be able to cash in. Sincerely, Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.Learn more about real estate investments at http://www.suncoastrenttoown.com or send a blank email to mailto:suncoastrenttoown@getresponse.com
MORE RESOURCES: Couple in California surrogate case also faces two lawsuits over real estate business practices NBC News Altadena’s rough real estate market: Slower sales, lower prices, lottery winner plucking up properties Los Angeles Times Real estate magazine reports Les Wexner as Blue Heron buyer The Martha's Vineyard Times Real estate expert warns socialist mayoral candidate could trigger massive NYC exodus - Fox Business Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem - Crain's Detroit Business Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem Crain's Detroit Business Canadian psychologist Jordan Peterson sets up shop in the Valley, records show The Business Journals Office real estate wide open in Denver as vacancy rate hits 36 percent Colorado Public Radio Homeownership education needs a reboot — and a new messenger Real Estate News by RealEstateNews.com NAR Real Estate Forecast Summit National Association of REALTORS® 21-year-old confessed but not convicted killer pleads not guilty to murder of real estate agent ABC30 Fresno Vail Valley real estate inventory is on the rise VailDaily.com Real Estate Partners Dollar Tree REAL ESTATE | 5221 Little Cedar Lane in West Bend, Wi | By Emmer Real Estate Group Washington County Insider A New Perspective: Here Comes the Groom | Real Estate Insights Piedmont Exedra Let's Talk Business: June residential real estate sales lagging, heritage grants and more Pueblo Chieftain Dawson County weekly real estate transactions, July 18 Central Nebraska Today State lawmaker joins Westport commercial real estate brokerage as vice president Hartford Business Journal ‘Unfiltered’: Are agents ready for a buyers market? Real Estate News by RealEstateNews.com 5 Essential Tech Tools for Real Estate Agents National Association of REALTORS® Top teams join eXp, KW, Real; ERA affiliates merge in Atlanta Real Estate News by RealEstateNews.com Boston Real Estate Times Unveils 2025 Excellence Award Winners: Honoring the Visionaries Shaping New England’s Future Boston Real Estate Times 4 Florida Housing Markets Currently Worse Than Cape Coral Norada Real Estate Investments Bard College hires real estate advisor and broker to sell Simon’s Rock campus - The Berkshire Edge Private Credit Surges in 2025 as Real Estate Developers Bypass Banks The World Property Journal What's the most expensive property sold in Rhode Island? July 18 real estate transactions The Providence Journal Property management with an owner’s mindset J.P. Morgan EG Real Estate: 8 New & 10 Sold East Greenwich News New York Housing Market Trends 2025: Is the Tide Turning for Buyers? Norada Real Estate Investments Today’s Mortgage Rates: The States Offering Lowest Rates – July 18, 2025 Norada Real Estate Investments Real estate news: Senior apartments in Tustin sell for $83M; Fullerton Metrocenter snares $118M Orange County Register Real Estate Market Report (June) highlandscurrent.org Los Angeles Water & Power commits $100 to real estate debt Pensions & Investments Operation Pawssible: Greenbrier Humane Society gets a boost from local real estate company Mountain Messenger SRS Real Estate Partners Arranges $4.53 Million Ground Lease Sale of Walmart Property in Deltona, FL citybiz Second car crash into downtown Columbus building prompts owner to again seek demolition The Columbus Dispatch Bridgemarq Real Estate Services® Declares Dividend Yahoo Finance Corcoran McEnearney Announces Evan Lacopo to Lead the Number One Real Estate Office in Alexandria, Virginia Alexandria Living Magazine Licking County real estate transfers for June 30-July 4 range from $200,000-$14.6 million The Newark Advocate Moon Becomes Next Real Estate Frontier, NAR Reports Higher Foreign Investment In US Huntsville Business Journal Banner Real Estate Group Breaks Ground on 334-Unit The Faywell Multifamily Development in The Heart MultifamilyBiz CBRE Announces Strategic Leadership Appointments Across U.S. & Canada Advisory Business Boston Real Estate Times Gravelle advises on current real estate market in Grant County Columbia Basin Herald Mortgage Rates Rise This Week Staying Within a Narrow Range Below 7% Norada Real Estate Investments Mapletree Sells Sun Belt Warehouse Portfolio to EQT Real Estate for $241M Commercial Observer Why Relationships Still Win: Ian Brandon of Cambridge Savings Bank on Lending Smarter in an Uncertain CRE Market Boston Real Estate Times GenesisM Breaks Ground on 154,000-Square-Foot Biomanufacturing Facility in Bedford, MA Boston Real Estate Times July Economist Snapshot: What Will the Big Beautiful Bill Mean for Commercial Real Estate and Housing? Urban Land Magazine Home Buyers: Stop Freaking Out After the Home Inspection National Association of REALTORS® Miami-Dade’s self-storage surge a boom for real estate IslanderNews.com Top Stocks for Real Estate Investment Elite AI Stock Forecasts - Massive wealth growth Jammu Links News Tips on spotting real estate investment opportunities and avoiding risks, from experts at GR Property Group Community Impact LOCAL REAL ESTATE TODAY 7.18.25 KQEN News Radio SRS Real Estate Negotiates $4.5 Million Sale of Walmart-Anchored Property in Metro Orlando Shopping Center Business Stage Point Europe Launches Its RWA Token $SPET, Setting it up as a Bridge Between Crypto and Real Estate Morningstar Stonelake Capital sells dozens of industrial buildings across US for $920 million The Business Journals The Pipeline: Commercial real estate roundup for 7.18.25 Richmond BizSense Drake Real Estate Partners closes largest fund yet after pivoting to institutions Private Equity Real Estate | PERE Hunt Companies Acquires Controlling Interest in Carter, Strengthening Real Estate Development Platform Business Wire Vend Leans Into Verticalisation As Real Estate Revenue Grows 11% In Q2 onlinemarketplaces.com Law firm expands real estate practice with economic development heavy hitter - The Business Journals Law firm expands real estate practice with economic development heavy hitter The Business Journals New plans unveiled for Water Street’s second phase Tampa Bay Times |
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