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Beginners Real Estate Investing Guide
Real Estate Investing - Ask
Questions Before Making an Investment
First Time Real Estate
Investor
Real Estate Investing - Planning
Your Investment Strategy
How to Find Real Estate
Investment Properties
Getting a Professional Home
Inspection
Large Profits From Inexpensive
Real Estate Repairs
Real Estate Investing - Costs
and Fees
Real Estate Insurance
and Risk Management
Real Estate Investment Risk
Part 1
Real Estate Investment Risk
Part 2
Getting The Best Return For
Your Investment
Creative Financing
For Real Estate Investors
Real Estate Investment Tax
Considerations
Real Estate Rental Properties
- Great Investment or Nightmare
Real Estate Foreclosures - Great
Deal or Headache
Flipping Real Estate for Profits
Slow Return On Real Estate
Investments
Negotiating for the Best Possible Real Estate
Deals
Real Estate - A Time to Buy and a Time
to Sell
Creating Your Real Estate
Investment Strategy
Investing and Growing
Your Real Estate Portfolio
Commercial Real Estate
Investing
Real Estate Marketing
Understanding Real Estate Law
Do You Need An Real Estate Agent?
What The Real Estate Mortgage
Lender Sees
Do You Have A Career In Real
Estate?
Rural or Urban Real Estate
Investments?
Real Estate Investing on the
Internet
Real Estate Investing
- Property or Paper? |
Real Estate Investing - Introduction
Real Estate Investing Tips
Getting into real estate investing is a great deal easier than you might
imagine. In fact, you could get started today - right now. Look around in
your area for someone that needs to sell their home.
You can find this information at your county clerks office, or in your local
newspaper. What you are looking for is Notices of Default. What this means
is that they are about to lose their home, because they can no longer make
the payments. The mortgage lender is about to foreclose, but that hasn't
happened yet.
What you do is visit the home owner, and offer to help them out. You and
the home owner then visit a real estate lawyer, and tell them that you need
a subject to contract. You then take over their payments, but the house remains
in their name, until the loan is paid off.
Possession of the property is also taken over by you, as soon as the contract
is signed. You get the property in tip-top shape, and rent it out on a
rent-to-own basis. This is also called a lease option. You have a lease with
the person, and a separate contract that gives them the option to buy the
property from you as well. They pay you a deposit upfront, and that deposit
is not refunded, no matter what they decide to do.
Now, if they default on the lease agreement, the option contract is cancelled.
You can easily evict them, and start all over again....but you get to keep
all rent that they've paid, as well as the non-refundable deposit.
The idea here is to charge a higher rent than you are paying in mortgage
and insurance. This is easy to do, because everybody knows that payments
are cheaper on mortgages than they are on rent. The difference between the
rent and the mortgage payment/insurance/maintenance costs is your profit.
If you start with one property, and then work your way up, to the point where
you own many properties, you can eventually have a full time income - or
more - coming in from your rents.
You can also call landlords that have vacant property. Simply ask them if
they would be willing to sell you the property in a three or four years,
if you agree to sign a long term lease contract with them. If they agree,
get the contract, and then immediately find a renter for the property. Of
course, you can charge higher rent than what you are being charged.
Ideally, you should be getting $100 to $200 more in rent from your tenant
than you are paying for your rent/mortgage. For the option contract, you
should get at least a $1000 deposit.
Here are some examples of lease options:
A man was behind on his mortgage payments. He had lose his job. He was divorced,
so there was nobody else in the home to help cover the payments. He has child
support to pay, and he really needs to get out from under the payment, but
he has been unable to sell the house.
The neighbors have cousins who are staying with them. The cousins have recently
moved here because of a job transfer, but they are having a hard time finding
a suitable place to live. They simply don't have the funds to purchase a
house at the moment, but they know that they will in a couple of years. What
they want is a home that they can rent-to-own.
The neighbor calls the man, to see if he would be interested in him taking
over the payments of the property. He is, of course, interested. The neighbor
pays the man the money to catch up on the payments, gives him enough to pay
two future notes, and may even give him a little extra as well. There is
a contract between these two people, for a lease/option. The man moves out.
The neighbor then collects a $1000 downpayment from the cousins, and the
cousins sign a lease/option. The mortgage payments are $250 per month. The
man charges the neighbor $350 per month. The neighbor charges the cousins
$500 a month for rent. In a couple of years, the cousins qualify for a mortgage
on the property. The neighbor is paid the market value of the house, and
he pays the man the amount of money that they agreed on for the sale, which
is typically the amount of money that is now owed on the mortgage. The mortgage
is paid off, and everybody is happy.
Overall, the man collected $2400 plus a 1000.00 downpayment from the neighbor.
The neighbor collected $3600 plus a 1000.00 downpayment from the cousins,
but he also made a profit on the house. The purchase price agreement with
the original owner was for the remaining balance of the loan at the time
of the purchase. That was $42,000. The cousins, however, agreed to purchase
the home at fair market value at the time of the purchase, which is $100,000.
So, the neighboar also made an additional $58,000.
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Articles
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Beginners Real Estate Investing Articles
How to Advertise a Rental
Property
How to Build Equity
in any Real Estate Market
How to Find Motivated
Sellers
Developing a Profitable Real
Estate Investing Strategy
Bird Dogging: Getting Started in
Real Estate Investing
Buying Your First Home
Using Lease Options to Purchase Real
Estate
Real Estate Foreclosures
Increase Your Net Worth Through
Real Estate Investing
Interest Only Mortgages
Real Estate Investing
No Money Down Real Estate
Investing
The Power of the Lease Option
Real Estate Investing Tips
Real Estate Investments
Refinancing Your Mortgage
Loan
Paying Your Mortgage
Selling Your House without a
Realtor
"Subject To" Real Estate
Financing
Using Trusts as a Real Estate
Alternative
Search for Beginners Real Estate Investing Information
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