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Building Passive Income
Through Real Estate. Issue 9
Weekly tips and trends in the world of real estate investing. Derived from personal experience and network of contacts. Find out why we feel real estate is the number one investment medium.
11.17.2003
Subscribers: 206
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Welcome to "Building Passive Income Through
Real Estate". This week we are going to be talking about
how to get into to real estate with out spending a lot of
money. I received an email today from one of the readers saying
she would like to invest but don't have any money. She was
convinced she was wasting her time. The reality is, if you
don't have money, you need time. If you have the time to locate
deals, you can always find the money.
Secondly, I'll also talk about terms and their
use to add extra value to the deal.
Anyone interested in reading more about market
conditions across the country should check out the following
website. Realtors from across the country give their view
of the market conditions in there areas on a weekly basis.
You can check out their views at Realty
Times.
Contents:
1. What do I do if I don't have money.
2. Using terms to increase your immediate return.
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What do I do if I don't have money?
by Kevin Davis
There have been many people that started investing in real
estate with little or no money. While times have changed,
their are still ways to invest in real estate with very little
money out of pocket. In most cases, this will need much more
effort put forth in order to locate the optimum situation
for your position. If you didn't have any money, but you felt
you could possibly turn a $20,000 profit in 4 weeks, could
you invest some of your time to make up for your lack of money?
Of course, not everybody can. Not everybody is made out for
investing in real estate. There is a sense of fear in many
of us when we look at the risks involved. There are risk in
any type of investment, you need to try to minimize those
risks in order to succeed. Below is a list of a few ways to
start investing today while you build your fortune.
How to invest with little or no money
- Hard Money - Cold hard cash, if you can find the right
property at 60% LTV or less, there are plenty of private
lenders out there that will loan you the money based solely
on the property. While the interest rates and costs are
much higher than any conventional loan, at this discount
it rarely matters. In this case, you want to have a buyer
not to far away to turn the property over for a profit while
still giving the buyer a good share of the equity to ensure
it sells quickly.
- Contract Assignment - While you may not qualify for the
loan yourself, at least get the propoerty under contract
for as long as possible while you find the buyer. If your
confident you can find a buyer, then you can sell the contract
for a fee. This is very much like a birddog program. While
it is possible to work out a deal with someone to find them
properties, unless your goign to step up and get the property
under contract, many deals will be lost.
- Short Sales - Short Sales with banks are another great
source of properties at a discount that would then give
you the equity you need for a hard money loan. You will
want to build a relationship with the bank that portrays
that you are there to help. They do not want to hold properties
they don't have to.
- Tax Liens - I talked about tax liens in a previous article.
These instruments allow you to get some incredible returns
on whatever you have available to invest.
- Have the current owner stay on the mortgage - If the seller
is in trouble and just can't make the payments, have them
stay on the mortgage and quit claim deed the property over
to you. At that point they should move out and you should
place a tenant in the property. After about six months,
you then have an established rental and should be able to
finance the property yourself and payoff the seller.
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Using terms to increase you immediate return.
by Kevin Davis
Here are some terms you may want to try. Remember
you can always ask for the world and see what you get. In
a soft market, these can work very well.
- Seller to pay all closing
costs
- Seller to paint the property
inside and out.
- Existing escrows to be transfered
to buyer at closing. Depending on when you close, this could
save you money in property tax and insurance buy using what
the previous owner had already paid in their mortgage payment.
- Seller to shampoo and replace
carpets.
- All appliances included and
guaranteed for 90 days from closing date.
- Thoroughly inspect property
and find all defects. You can then use these defects as
discounts when the seller refuses to repair them. This is
not usually used on REO bank property that is bought AS
IS.
- Always include a subject to
inspection clause.
For a recorded conference call with Ron LeGrand
or Dolf DeRoos, send me an email at
mailto:webmaster@firehorseinvestments.com
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Building Passive Income Through Real Estate
is published by Kevin Davis, Editor & Contributing Author.
Every week.
You can send your feedback to mailto:webmaster@firehorseinvestments.com.
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Copyright ?© 2003 Building Passive
Income Through Real Estate. All Rights Reserved |
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