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Secrets of Making Money from Real Estate - Part 3
Great, now how do I actually INVEST in real estate? Investing in real estate will get easier the more you do it. The first deal may take some time, but like anything, the more you do it the better you'll become. Here are some guidelines for investing in real estate. Establish how much you can borrow: Know your limits. Don't go looking for $400,000 houses when you can only afford a $200,000 house. Before you invest real estate you must know how much you can borrow from your lender. This can be anywhere from 80%-100%. If you are investing for the first time, banks will most likely only want to lend you 80%-90%. Once you've established good relations with the bank after five to ten deals, they will most likely be willing to cut you better deals and offer 100% financing. Some private lenders may offer you mortgages and home equity loans of 100%-125%, be careful with these especially if they are individuals. Their motives are often only profit. Most people dread seeing their banker, hoping that THEY will approve your loan application. However from my experience, you need to show the bank who's boss. By this I mean: - Do not deal with only one bank, big mistake. Deal with lots of other banks and let the banks know about it. Send out your loan application to as many banks as you like. The best bank that comes back with the best deal wins. Other things to keep in mind before applying for a loan:Don't lie, you'll get caught and be in a lot of trouble. Try to eliminate liability payments. Or lower payments. Another choice you must make is whether to make the loan an interest only one or a principal and interest loan. I generally prefer to take out interest only loans for several reasons. You will get more cash flow from a property if the payment is interest only. This can go straight to your pocket or cover and unexpected payments with the property. You will also be able to borrow more because you make smaller payments. You may also have the option of paying off the rest of the principal at a later time. Depending where you live, you might also get a tax advantage for taking out an interest only loan. Also, why would you want to pay off debt on something that is already putting money in your pocket and appreciating in value? Wouldn't the money be better spent on a deposit on another rental property which will give you more cash flow. I know I would rather owe 80% on thirty properties earning me $3,000 a year than two or three properties that I have no debt on. Does this mean you can't take out a principal and interest loan? Of course not! If that's what you really want to do and you still make money on the property, go for it. Asset protection: A house will most likely be your biggest and most expensive asset, you'll certainly want to protect it. There are three ways you can do this. Physical protection, corporate protection, and insurance protection. Physical protection is what you can change in the properties structure to protect it. So you could go as far as building a moat around the property! The first step would be to not buy a house in areas of high crime or natural disaster such as earthquakes or landslides. Then think about installing security systems, burglar alarms, and fences. Having your property in a corporate entity such as a limited liability company, corporation, or trust provides legal security and possible tax breaks. This all depends on where you live, so it is important to look into this type of protection if you are thinking about buying a lot of properties. Insurance is the third type of protection. Many insurance companies or even banks will give you good rates for insurance on an investment property. This is because they consider a house a very safe investment! You can get insured on all kinds of things, like earthquakes, depending on how much you want to pay. Be sure to find out the cost of insurance before you buy a property as well so you can input it into your budget calculations. There is no I in team: Before buying a property be sure to have good team. You will definitely need an accountant and a solicitor. It is important to have a team because you can't do everything, you need specialists. Everyone in your team should be passionate about what they do and know that you are passionate about what you are doing ( real estate investing!). People in your team must have experience in buying property! If you feel that anyone in your team is slack, inexperienced, and has questionable motives don't work with them anymore. You may also find It of use to work with a real estate agent who is a property investor themselves. This can be good because If the agent invests in property he or she will have a good idea of what your looking for. However make sure you know the agent's motives. If they are a property investor themselves, why wouldn't they buy the property? Next, Learn how to analyse a deal in Part 4. This article was written by John Whiteside. The original article can be found here http://www.use-your-equity.com/realestateinvesting.html . Use-Your-Equity can show you how to create value in your home, then show you how to use the newly created equity to make money. http://www.use-your-equity.com for more information.
MORE RESOURCES: The ‘Most Colorful Home in Queens’ Has a Dark Secret The New York Times Texas now restricts Chinese nationals from buying property. Is it alien land laws all over again? The Guardian Central Mass. real estate transfers, Sunday, Sept. 14 Worcester Telegram DHHL Delays ʻEwa Real Estate Swap To Make Sure Donation Isn’t ‘Dirty Land’ Honolulu Civil Beat Dodgers star Shohei Ohtani seeks dismissal of lawsuit, claims he is victim of NIL misuse - USA Today Commercial real estate isn't just for billionaire developers. A&E explores this hidden world with a new reality show. Business Insider Island real estate transactions – 09-17-2025 The Anna Maria Islander Mel Foster Co. School of Real Estate offers pre-license courses Quad Cities Business Journal Local real estate investment firm details positive federal tax policy changes for investors SiouxFalls.Business Richland County property transfers recorded Sept. 8-12 Mansfield News Journal Real Estate Startup Aims to Help Clients Make Smarter, Data-Driven Decisions National Association of REALTORS® Real Estate Notes: Downtown Hilton hotel opens Nashville Post Matt Curtis Real Estate Completes 150th Home Build in Guatemala, Extending Global Mission of Service Huntsville Business Journal Commercial Real Estate Roundup for Sept. 12, 2025 Idaho Business Review Real Estate Transactions, Sept. 15 edition Hopkinton Independent Calvin Harris Accuses Financial Adviser of Stealing Millions to Fund ‘Boondoggle’ Real Estate Project variety.com Bay Area’s historic Green Gables estate sells for $85 million after steep price cut San Francisco Chronicle Inside 83 South Fullerton Avenue, a Montclair Colonial Revival with historic details - Bergen Record Detroit among the best U.S. cities for first-time real estate investors ClickOnDetroit | WDIV Local 4 Property transfers: August sales range from $5K to $600K in Crawford County Bucyrus Telegraph-Forum Buyer in $7.5M Palm Beach house deal is daughter of late Texas oil heiress Caroline Hunt Palm Beach Daily News Take a look at two expensive new build Squantum homes for sale: Photos The Patriot Ledger Real Estate: September 1 to September 5 Newport This Week Ocean-to-lake estate hits the market at $134 million in Manalapan, south of Palm Beach Palm Beach Daily News Press Release: Korrin Petersen Joins Bowditch’s Real Estate and Environmental Law Practice Bowditch & Dewey Homes in New Hanover County sold for lower prices recently: See how much here - Wilmington Star-News Homes in New Hanover County sold for lower prices recently: See how much here Wilmington Star-News She Found a New Way to Sell High-End Houses: Mock the Rich The New York Times Calvin Harris Accuses Financial Advisor Of Stealing $22.5 Million For Real Estate "Boondoggle" Stereogum ‘People are getting a chance to invest in real estate’ realnoevremya.com Canadian Apartment Properties Real Estate Investment Trust (TSX:CAR.UN) Confirms September 2025 Monthly Distribution Yahoo Finance Choice Properties Real Estate Investment Trust (TSX:CHP.UN) Declares C$0.064 Cash Distribution for September Yahoo Finance Bill Gates former Florida mansion hit the market for $23.5 million Treasure Coast News The 36 Top L.A. Real Estate Agents of 2025 The Hollywood Reporter Best Real Estate Projects 2025: Channel 24 The Business Journals A glance at Dayton's top commercial real estate transactions, totaling $18.8 million The Business Journals Dunlap & Moran real estate attorney named to Best Lawyers in America 2025 Sarasota Herald-Tribune 66K-sf property near Rice Village sold Texas Real Estate Research Center HAR.com Expands to Include Commercial Real Estate Listings Realty News Report AI and analytics key to navigating ‘exciting inflection point’ in real estate, UBS CIO says Pensions & Investments University of Alabama business school receives $5 million donation The Tuscaloosa News 261-unit River House along River Walk sold Texas Real Estate Research Center Calvin Harris Accuses His Financial Adviser of $22M Theft: ‘Absolutely Breached That Trust’ Billboard Inside Savannah Homes: 3 fully furnished condos overlooking Chippewa Square for $6.995M Savannah Morning News Churches tackle 'ambitious' growth plans with real estate The Business Journals Homes in St. Joseph County sold for lower prices recently: See how much here South Bend Tribune Best Real Estate Projects 2025: Sutter Health Park Upgrades for MLB Play The Business Journals Navigating home inspections, objections and appraisals in Colorado real estate The Chaffee County Times Hawthorne Capital Named Fastest-Growing Real Estate Company in the Americas by Financial Times Business Wire Rare two-family waterfront home in Fairhaven sells for $1M. Weekly home sales SouthCoastToday.com Strive305: Tico Casamayor & Irvans Augustin Talk Real Estate with Natalee Lima & Denise Sainz Miami's Community News For $23.5 million, Bill Gates former Jupiter Island home could be yours. See photos Treasure Coast News Basin Street Properties names new leaders amid restructuring The Press Democrat The Rise Of Branded Residences: A Global Real Estate Trend With Local Impact - Harlem World Magazine The Rise Of Branded Residences: A Global Real Estate Trend With Local Impact Harlem World Magazine One of these Quincy homes could become city's most expensive sale ever The Patriot Ledger Monroe County property transfers: Sept. 16 The Herald-Times Avalon X (AVLX) The Best Crypto Project Backed By Real Estate Builds Momentum As Pi Network Holders Take Notice BlockchainReporter Like Real Estate? Earn 12% With AWP Seeking Alpha Signs of more affordability, inventory in mid-Hudson Valley real estate market this fall Times Herald-Record Northwest Healthcare Properties Real Estate Investment Trust Announces September 2025 Distribution Yahoo Finance |
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