More fortunes are built in real estate on borrowed money than in any other popular business.
Why?
All real estate has a certain basic monetary value that usually rises as time passes. But there are other advantages, besides the usual rise in value, to making your fortune from real estate. Here are some typical advantages:
In real estate, it is easier to use other peoples' money - even if your credit is not the best when you start.
In most real estate deals, little of your labor or time is required for the usual piece of income property.
As a property owner, you are enormous legitimate and legal tax savings on your real estate income.
Almost all real estate is an excellent asset on which you can borrow more and more money as your property rises in value (money to buy more and more income-producing property!)
Nearly the entire world is in the midst of a real estate boom; hence your property will almost always rise in value with the passage of time.
You can't go wrong with Real Estate
Why can't one go wrong with real estate? Because:
Adequate, well-maintained housing and commercial and industrial space are avidly sought by renters in almost every area of the world.
Highly desirable properties are hard to come by since construction rarely keeps up with demand.
Proving the maxim, “Location, location, location,” good locations are often rented long before a building is completed.
Businesspeople know that a good location can mean the difference between failure and success for a business firm.
Property vacancy rates, often assumed to be 5 percent for financial analyses, are typically less than half a percent in well-located property.
Desirable properties that have been rented for years become popular, and almost as soon as a vacancy occurs someone shows up to rent the space. (The vacancy rate in some properties I know of has been 0 percent for 10 years!)
Thus, it really is almost impossible for you to lose money in well located real estate.
Where to locate money
There are many ways to look for money, such as:
Writing to various lenders asking them if they would be interested in your real estate loan.
Calling lenders in your area who might be interested in lending on your real estate proposal.
Visiting in person lenders whom you think would be willing to help you.
Looking on the Internet for real estate lenders who might work with you on the deals you have.
Reading the Real Estate Section of your local large-city Sunday newspaper, looking for ads run by lenders in your area.
Consulting the various directories of real estate lenders listed at the back of this book to find the names, addresses, and telephone numbers of many lenders.
Finding deals where the seller is willing to hold your mortgage.
How do I get rich in Real Estate?
1. Choose the type of properties you are comfortable with:
Residential properties.
Commercial properties.
Industrial properties.
2. Pick the location of your properties
Not all property locations are the same.Check the local city website for hints as to where the city is expanding.
Read real estate reports and find out which area has shown the highest growth, price increase and development.
Try to choose established neighborhoods as the image of the neighborhood has been defined
3. Call the owner. Make a list of the following and compare:
Sale Prices
Down payment amount
Income statements
Expense statements
Then,
Count up how much money you have available.
Study your Summary Sheet of available properties to see if the amount of money you have is in line with the asking down payment in your area.
If you do not have any money, try to take over a property for zero cash down.
Even if you have enough money for a down payment, try to get the seller to reduce his or her asking down payment, so you conserve your cash.
Negotiate as much as you can. Keep talking until you get an agreement on the down payment (be this zero cash down or an acceptable sum for you).
Three key factors to consider for no money down transactions:
There are three keys to getting residential income real estate for zero cash down are to:
1. Do your best to analyze the seller's situation. Put yourself in the seller's place and try to understand why he/she wants to sell the property.
2. Work to give the seller what he or she desires, provided the deal can be done on zero cash from you.
3. Try to give the seller the asking price, a higher rate of interest, large monthly payments, or any other “sweeteners” while reducing your down payment to zero.
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