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How Invest Successfully In Real Estate.
Real
estate investing is always good and sometimes it's red
hot. There are basically four steps to investing in
single family homes, that even a part-time investor
can execute in three to four hours per week.
Real estate investing is always good and sometimes it's
red hot. When it's hot dozens of real estate seminars
begin rolling across the country and thousands of people
spend thousands of dollars for investing education.
It's
startling to learn that of all those thousands of eager
folks who attend these seminars only about 5% buy even
one investment house. Why? The real estate gurus sell
the "sizzle" and make profiting from real
estate sound easy. The truth is that it's simple, but
not easy.
Here's
a quick plan that will enable anyone to begin building
financial independence.
There
are basically four steps to investing in single family
homes:
1.
Buy homes below full market value. Yes, people really
do sell homes for less than the home's full value. The
key is to understand that most home owners will only
consider a purchase offer that is all cash and within
5% to 10% of their asking price.
The
successful investor learns to find financially distressed
home owners who have no choice but to sell for less
than market value. They have lost their job or been
suddenly transferred; they are divorcing; they been
living beyond their income; the family has been overwhelmed
with medical bills and, not uncommonly these days, their
money has gone to support a drug habit.
Those
are examples of motivated sellers. They have to sell
and they will accept something other than a conventional,
all cash offer.
2.
How do you find motivated sellers? You work at it!
Like any business it is important to develop a little
marketing plan. One that is simple, yet very effective,
is the one that was proven 75 years ago by the Fuller
Brush company; door to door sales.
You
are selling your skill as a home buyer to people who
must sell. Your are there when they need you and you
have the skill to help them solve at least part of their
problem. With door to door prospecting you will learn
more and buy more homes quicker than any other method.
However, most people just won't walk door to door for
three or four hours per week. OK, there are other ways.
You
can watch public notices for the announcement of foreclosure
sales. Meeting with a home owner right after they've
received a notice that they are about to lose their
home allows you to deal with a very motivated seller.
Other public notices that provide buying opportunities
include probate, divorce and bankruptcy. You can follow
the Homes For Sale listings in your local newspaper
or Internet site.
You
can telephone the names found in these notices or, and
this is the least time consuming, send a postcard expressing
your interest in buying their property. It will produce
buying opportunities, just not as many as personal contact.
3.
After you've found a motivated seller you must understand
how to frame offers that provide benefits for both
you and for the home owner. A good real estate investor
quickly learns that this is not a business of stealing
property, but of solving problems in a way that benefits
the seller.
The
home owner is in a tight spot of some kind and you can
save them from public embarrassment and, in most cases,
give them at least a little cash to get a new start.
No
investor can afford to leave cash in every deal. No
one but Bill Gates has that much available money. You
must use creative techniques like, leases, option and
taking over mortgage payments. Little or no cash is
needed for those deals. You can find plenty of reasonable
priced educational material on those subjects in book
stores or on EBay. The same education that seminars
sell for thousands of dollars.
4.
You make your profit when you buy! Never make a
purchase until you've carefully determined exactly how
you will get to your profit. If you hold it as a long
term investment will the monthly rental income more
than cover the monthly mortgage payment? Will you sell
the deal to another investor for fast cash? Will you
do some fix-up and sell the property for full value?
Will you quickly trade it for a more desirable property?
Have a plan before you buy.
There
you have four steps that even a part-time investor can
execute in three to four hours per week. What's the
missing ingredient? Your determination and perseverance.
If you will unfailingly follow the plan for a few months
you will be well on your way to financial independence.
1howto.com
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