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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 Years and 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: There is something emotionally charged about the buying and selling of New York high-end real estate. How else to explain the juggernaut of reality TV shows about high-end brokers? After 30 years of marriage, Sharon and Michael Newman decided it was finally time to move from the Catskills to New York City. On blocks near Kissena Park streets are quiet, houses are small, and the electricity that charges the atmosphere in downtown Flushing is nowhere to be found. A five-story, seven-bedroom house in Brooklyn Heights has sweeping views of New York Harbor and the Manhattan skyline. Demand is so intense that there are waiting lists in some buildings, and a few landlords report that eager renters are even bidding up rents. Sales at the very high end of the market barely missed a beat in the recession. But that prosperity hasn’t yet trickled down. A Flatiron condo, a Midtown South co-op and a Brooklyn Heights carriage house. A four-bedroom ranch in Montclair, N.J., and a four-bedroom colonial Cape in Babylon, N.Y. For a century, Roosevelt Island housed a grim penitentiary. It was demolished in the 1930s. More borrowers are opting for fixed-rate loans with terms other than the standard 30 or 15 years, especially when it comes to refinancings. Two more glass skyscrapers are added to a group of towers on the waterfront of Long Island City. Insurance coverage for a co-op unit; when a tenant is ‘blacklisted’; a co-op is smaller than estimated. The market for $500,000-to-$600,000 houses in Westchester has become especially active. A shaky real estate market means more sellers are providing buyer concessions, from gift cards to help with paying property taxes. Houses of worship are adaptable to residential and other uses as congregations dwindle. Nearly two million Americans could benefit from mortgage relief from the nation’s biggest banks, as part of a broad government settlement to be announced on Thursday. A cold war-era satellite relay station is for sale in California after a Silicon Valley mogul gave up on plans to turn it into a weekend home. How can I make my front porch more appealing to buyers? Court hearings meant to protect New York homeowners from foreclosure are hopelessly slowed by endless paperwork and requests for additional information. The Bay Area and Silicon Valley expect the windfall from the Facebook stock offering to make their in-demand region even hotter. The house, designed by the architect Eric Fisher, looms over the street like a big industrial arm. A town house in Dallas, a midcentury modern in Rhode Island and a Tudor in Denver. Prices in some parts of the country are still off by as much as 25 percent from their 2007 peak. Trinity Church is the largest landlord in Hudson Square and is part of the effort to rezone the area to residential from manufacturing. Rising oil prices and a boom in shale exploration are leading companies to add office space in the Houston area, most notably Exxon Mobil. Ms. de França is the president and chief executive of Douglas Elliman Development Marketing, which focuses on new residential developments. Meet the real estate broker’s interns: an ambitious group willing to do anything, earn nothing and wake up early on a Sunday to fluff the couch cushions at open houses. A Flatiron condo, a Midtown South co-op and a Brooklyn Heights carriage house. A four-bedroom ranch in Montclair, N.J., and a four-bedroom colonial Cape in Babylon, N.Y. Homes in Dallas, Rhode Island and Denver. Compare the cost of renting and buying equivalent homes. For recently divorced men, a new breed of decorators offers help navigating a strange new world. Plants that light up the winter garden can be found at Broken Arrow Nursery in Connecticut, which has long been a favorite of gardening geeks. A sister in need drew the painter Beverly McIver back home to North Carolina, unaware that a new beginning was in store for both of them. A jewelry designer finds striking new objects for storage. Timothy Sakamoto and Jochen Repolust are part of the small but growing niche making mobile apps focused on specific works of architecture. To promote an auction of 20th- and 21st-century design, the interior designer Stephen Sills has created a preview exhibition in an apartment at the Apthorp. Fishs Eddy now sells plates acquired from the archives of the now-defunct Syracuse China Corporation, many more than 100 years old. The designer Russell Greenberg creates custom baby rattles with ends shaped like profiles of mom and dad. |
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