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7 Different Ways Anyone Can Become a Real Estate Investor
Being a real estate investor is not really that hard, Sometimes you do not need any money down. Other times you do not need any of your own money down. Below are 7 Methods to buy property and earn money. 1 - Buy and Flip This is a Method where you buy Real Estate at below Market Price and sell quickly and make some fast profits 2 - Buy Fix and Flip This is Similar to method 1 except you would typically hold the property a little longer so you could do some fix ups, This method is designed to yield a higher profit then Method 1. 3 - Buy and Hold You buy the property and find a renter. If you were to buy 2 Properties a year for 10 years you could have 20 Properties all earning you a positive cash flow when you retire. Even a modest positive cash flow of $500 a Month per property in Todays dollars would equal a $10,000 a month retirement income 4 - Wrap Mortgages This method works well with people who have a hard time getting a mortgage because of income or credit or both. You sell them the property on a contract. You keep the existing mortgage and stay on title. You then wrap the old mortgage with a new mortgage. Let's say you have a 30 year mortgage at 6% for a $100,000 with a monthly payment of $599.55. You Give them a 30 Year Wrap mortgage at 8% for $125,000 with a monthly payment of $880.52. You could have provisions where if they refinance in 3 - 5 Yearsand pay of your mortgage and become sole owner. 5 - Lease Option Lease with an Option to buy is similar to a wrap mortgage but they are renting the property at an above market rent. They do have a right to buy at some fixed priced in the future. As an Example you could rent them the property in Example 4 for $900 a Month. They will be able to purchase the property in 3 years at 5% below the appraised value (from an agreed upon appraiser). They also agree to keep the house in good repair. If they make all payments in a timely fashion $100 of each months rent would go towards the purchase price. 6 - Equity Share Equity share involves and investor and a Homeowner. The Investor will put down the down payment and the homeowner will live in the house and make all the monthly mortgage payments. The investor will own 50% of the House and the homeowner will own 50% of the House. After 3 - 5 years you will either sell the house payoff the mortgage and return the down payment to the investor and then divide what's left or the homeowner will refinance the house and buyout the investor. (Sometimes the investor will record a 2nd trust deed with low or no interest against the house to secure there interest) 7 - Buy Low Refinance High Another popular method is to buy low and refinance high. You buy a property for $70,000 with $5,000 down leaving You a $65,000 mortgage. You do $10,000 worth of improvements to the property and then refinance it for $110,000. The Difference between the new loan at $110,000 and the old loan at $65,000 would be $45,000 cash in your pocket. Your net cash would be $30,000 since you have placed $15,000 cash in the property already. You can now use method 3 find a renter and hold the property long term. You could also use methods 4,5 or 6 to have a positive cash flow now and lock in a profit in 3 to 5 years. The above are just some of the many 100's of methods successful real estate investors use to earn money. The key component in any of the above methods is finding the right financing. A loan for the buy and hold method may be very different then the loan for the buy and flip method. The wrong loan could be the difference between a nice profit and a modest profit or maybe even a loss. (You wouldn't want a loan with a large prepay penalty in the buy and flip method) make sure you work with an experienced loan professional who can Tailor a loan to meet your needs About the Author Get Mike's Newsletter Here Copyright © 2005-2006 Mike Makler
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 Refined Real Estate: Historic Queen Anne Polson House lists for $6,950,000 seattlerefined.com The Realtors' Big Defeat The New York Times Luxury's Latest Battleground: Real Estate | BoF The Business of Fashion Seabold Construction Ties Demise to Dispute with Real Estate Developer Engineering News-Record 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 Local real estate agents face uncertain future with new negotiation rules WJHL-TV News Channel 11 Central Texas housing experts talk impacts from $418M real estate settlement - 25 News KXXV and KRHD Central Texas housing experts talk impacts from $418M real estate settlement 25 News KXXV and KRHD What National Association of Realtors agreement means for Texas real estate KAMR - MyHighPlains.com Rules that helped set real estate agent commissions are changing. Here's what you need to know KXLY Spokane A luxury agent on how the NAR settlement will change his business The Washington Post What Seattle-area homebuyers should expect after national settlement The Seattle Times National lawsuit could shakeup housing market, cut into real estate agent commission 11Alive.com WXIA CrewBaltimore’s mission to accelerate women’s success in real estate Afro American Newspaper Cities Face Cutbacks as Commercial Real Estate Prices Tumble The New York Times Swimmo Invest Opens up a New Chapter in the Real Estate Industry Markets Insider Will March bring more madness to Craven County's real estate market? New Bern Sun Journal Settlement will affect Iowa homebuyers KCCI Des Moines Realtor group will pay $418M to settle commission lawsuits The Associated Press Realtors Reckon With a Seismic Shift to How They Get Paid The Wall Street Journal Once America's Hottest Housing Market, Austin Is Running in Reverse The Wall Street Journal Realtors settlement to lower home sale costs, alter commission structure - The Washington Post The Washington Post A commission settlement may affect housing market 9News.com KUSA National Association of Realtors Agrees to Slash Commissions to Settle Lawsuits - The New York Times Illinois real estate: Home sales in Peoria, Tazewell, Woodford counties Peoria Journal Star Israeli real estate event: Legal complaints escalate NorthJersey.com Bay Area Real Estate Executive Charged with Wire Fraud, Identity Theft in Investment Scam - Hoodline Making Sense of New York's Confusing Luxury Home Market The Wall Street Journal 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 Foreclosures Are Rising—Especially in This One State—but Not for the Reason You Might Think SFGATE Is the Era of the Celebrity Real Estate Agent Over? Industry Reacts to Settlement That Could Slash Commissions Hollywood Reporter Rules that helped set real estate agent commissions are changing. Here's what you need to know News10NBC China's Real-Estate Market Just Set a Record—but Not a Good One The Wall Street Journal Chicago Voters Face Choice on Tax to Fund Homeless Programs The New York Times Real estate lawsuit settlement upends decades-long policies that helped set agent commissions WQAD Moline Pension funds snap up real estate at steep discounts Financial Times Manhattan Real Estate Update westsiderag.com The NAR Settlement's Impact On Commissions And Home Prices Financial Samurai 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 Antigo Daily Journal End of 6% real estate commissions could mean lower home prices The Atlanta Journal Constitution Artis Real Estate Investment Trust (OTCMKTS:ARESF) and Armada Hoffler Properties (NYSE:AHH) Financial Analysis Defense World A Look Into the Future of Home Buyers' Agent Commissions The Wall Street Journal Agent Migration and the Power of New Mike DelPrete National Association of Realtors to cut commissions to settle lawsuits. Here's the financial impact. CBS News Blackstone, World's Top Alternative Asset Manager, Eyes Record Highs Amid Real Estate Bottom Investor's Business Daily Antitrust ruling rocks real estate: Buyers brace for shift in commission structures Straight Arrow News 4 Ways a Settlement Could Change the Housing Industry The New York Times Real Estate Stocks Drop As NAR Agrees to $418 Million Settlement Markets Insider Jill Schlesinger: Real Estate Settlement - My Bellingham Now My Bellingham Now - |
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