No money down - Creative Real Estate investing
It surprises many beginning real estate
investors when I recommend they get started investing
without using their own money. They find it hard to
believe that sometimes having money can be detrimental
to learning to be the best real estate investor you can
be.
It’s just that I've seen money used as a crutch to make
marginal deals go through. I know I've been guilty of
getting lazy and throwing money into a deal where a
little more imagination and prudent negotiation would
have served me better. With an open mind and the right
education, no money can be a force to push you to be a
faster, more creative, and more skilled investor.
You'd be surprised how fast you can pour your liquid
cash reserves into real estate. I've watched traditional
investors pour over $1 million into several deals in a
matter of months then have to wait until those
properties sold before they could free up enough of
their money to go out and buy more properties.
You'll never regret learning to buy with no money. It
will make you a much more savvy investor for those times
you do decide to use your own money or conventional
financing.
Money is never the issue when buying a property
Many investors think that money (or lack of money) is
what stops them from closing a deal. This MYTH is one of
the most limiting things that holds some investors back.
Understand that money is NEVER an issue—IF the deal is
right.
Say the following words to yourself over and over:
“If the deal is right, I will find the money!”
If there is a deal there you can and will find the
funding. The key is that the deal MUST be right. That
means for a cash deal (usually the kind where investors
think they haven't got the cash to do the deal) that you
need the right price.
This means a price at MOST 70% of the conservative "as
is" value LESS any needed repairs. This means you have
to go in at 29.95% to leave yourself room to negotiate
if you need to. This kills many deals. That’s okay. The
ones you want will work out. And you will find a way to
fund them.
How do I get the money to fund the deals?
Okay, so you've got yourself a signed contract on a
great cash deal. Now you need to find the funding.
Again, the key is that the deal is conservatively very
profitable (i.e. will make you money even if you made a
few mistakes estimating repairs, etc.) Here are several
sources you can use to make that deal a go:
Use the seller’s existing financing for part of the
purchase price. Buying "subject to" you only have to
fund the money for the seller’s equity!
Get a cash buyer at 90% of value and do a simultaneous
close or flip your deal to the buyer for a cash
assignment fee
Sell your contract to another investor, again for a cash
assignment fee.
Borrow the money from a private party lender at an
interest rate 3-5% higher than a bank CD and secured by
a first mortgage
Borrow the money from a hard money lender
Tap into a home equity or other line of credit
Refinance another property to get your down payment and
borrow the balance from a lender
Bring in money partners to fund the deal. (They get
depreciation and you control deal. They secure
themselves with a first mortgage for the amount they
have in, or if they finance it, they can lock in a
second mortgage to protect themselves. You agree they
get their entire principal back PLUS 15% before you
split any profits from the resale of the property. You
split profit 25-50%to them, the rest you.)
I think you get the idea here…
The key is that if the deal is right, you WILL find the
money. Never lose sight of that. The only two reasons
why this wouldn't be the case are fear and ignorance.
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Make money this month with real estate.How to control
real estate With no money down.Creative real estate
investing plans.
http://kv.iwarp.com/re.html
About the author:
David Finkel
Founders of Mentor Financial Group, LLC |
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