Archive for July, 2010
How To Make Money In Real Estate Investing
Investingin real estate is still a viable way to make money today. Even in today’s market obviously with all the record number of foreclosures it is easy to see why people would be skeptical about this. However the reality is that no matter you live real estate is very much a profitable business to get into.
The reasons are first of all with a myriad of foreclosures on the market there are a lot of people who need help. They need to see a way out of their housing problem. As a real estate investor you may be able to help homeowners out of a serious and stressful problem. By purchasing a property before it goes into foreclosure you can save the homeowners credit and stop the foreclosure process. Second a lot of properties are in very good condition and so once you buy them it wion’t take a long time to sell them outright or rent the property to someone else. By purchasing the property at deep discounts you may be able to give the homeowner some money to start over. With all the houses out there you can see the potential for enormous profits. It is just a matter of getting started.
So how does one get started? Well the first thing to do is to acquire financing never do anything until you have funds secured! you can use savings or if possible talk to a banker. But a far easier source for capital is private money there are a great many people with money who are looking for ways to invest it. Run an ad in the newspaper asking for money to help finance real estate deals. Also have a plan in place ready to show potential private lenders. People who have money to invest don’t want thier time wasted so by being prepared it will be easier to persuade them to do business with you. Let them know you will handle all the “grunt” work such as finding properties to buy dealing with homeowners and handling the rehab of homes if any is needed etc. By having a sound business plan and a persuasive argument you can secure funds needed to get your real estate business up and running.
Keep in mind to that you never ever want to CHEAT or be DISHONEST with anyone! there are far to many stories of people being cheated out of thier homes by unscrupulous investors. By being upfront and honest with people you can create a winwin situation for all involved. Another benefit to being honest is people respect that and will not hesitate to tell others about how you saved them from going into foreclosure. Also check with your state offices to make sure you know what you can and cannot do with homeowners who are in the foreclosure pipeline. If it is possible you can also hire a real estate attorney who can provide guidance for you in your individual locale.
I’m sure you can see that if you set up your business right not only will you make a lot of money but you can also help out a lot of good people in the process.
About the writer: I am a licensed realtor and have investigated the world of real estate investing critically. Please visit my site .
How Do I Know For Sure If My Real Estate Wholesale Deal Is A Good Or Bad Deal?
As with every type of real estate deal that’s ever been put together by a successful real estate investor the answer to this question will be found in the deals “NUMBERS”!
Real Estate investing is a numbers driven business! PERIOD! The number 1 Cardinal Sin in real estate investing is “Falling in Love with the Real Estate that Your Thinking About Putting Under Contract!” What a property “lookslike” has NOTHING to do with whether or not its going to make you any investment money!
Every real estate deal is really no more than a mathematical equation. Nothing more nothing less. If the numbers do not add up to profits and positive cash flow then the deal is NO GOOD! PERIOD! End of DEAL! DON’T DO THAT DEAL!!!!!!!! Its really very very simple to figure out which deals are good and which deals will harm you as an investor. And it all boils down to how well the investor can calculate the numbers on the “Deal Formula Spreadsheets”
Each type of real estate deal has its very own spreadsheet formula! Each of the following type of deal has a specific deal spreadsheet that will determine a good from bad deal:
* BuyFixSell
* BuyFix Rental
* Wholesale Deal
* Lease Option rent to own
* etc……
Once an investor masters plugging ALL of the correct spreadsheet VARIABLES into the Deal Formula Spreadsheets the margin for selecting a “Bad Deal” will be greatly diminished if not eliminated all together!
Wholesalers have a very specific Deal Spreadsheet Formula that works on every deal that we analyze. Taking into consideration that most of my wholesale buyers Investor Buyers will be financing their deal using a Hard Money Lender I will use the following formula to figure out my purchase offer:
Note: Home has a 100000.00 FMV
Note: Hard Money Lender will lend upto 70 LTV Loan to Value
Note: Repairs will cost 10000.00
Note: closing costs will cost 6000.00
Note: My minimum net profit is 7500.00
***Fair Market Value FMV X 70 =70000.00 max. loan amount
70000.00 max loan
10000.00 Repairs
6000.00 Closing Costs
7500.00 My Net Profit
= 46500.00 My Max. Offer to the Seller
My SAFE offer to the seller will be 46500.00. If this offer is accepted by my seller I will make 7500.00 when I wholesale this deal to my investor for 54000.00
46500.00 my offer to seller 7500.00 My profit on the deal
= 54000.00 Wholesale Price that my buyer pays me for the property
Using this formula my Buyer is going to able to borrow 100 of the money needed for his:
* Purchase price
* Repair Costs
*All Closing Costs
54000.00 My Buyers Purchase Price
10000.00 All Repairs Money
6000.00 All Closing Costs
=70000.00 Max loan from the Hard Money Lender
Total time invested in this typical wholesale deal averages just 2 hours per deal! 7500.00 in just two HOURS! Not a bad hourly wage wouldn’t you say!
Blow the Spreadsheet Formulas and you could endup losing your cookies! Not using them at all is next to real estate investing financial suicide for the new and experienced investor alike!
Use your Deal Formula Spreadsheets and always remember this: “The Numbers Don’t Lie!”
20 FREE FAQ videos about real estate wholesaling here? www.FAQMentor.com
About the writer: To find Minnesota lofts and condos for rent go to MinnesotaLoftsAndCondos.com. There you’ll find detailed information about rental properties in St. Paul Minneapolis and surrounding areas.
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Buy a home using these tips.There are a number of things a home buyers can do when buying a home to minimize the possibility of having a problem. You can make your contract offer subject to a inspection. You can ask the seller to sign an affidavit stating that to the best of his knowledge the permit was issued for the number of bedrooms the home has or alternatively you can check at the courthouse yourself. Just call and ask what department handles the permits then call that department and ask about archived information.
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Start shopping for a house immediately. Look at online listings in newspapers and in real estate guides. Locate a real estate agent that’s active in the neighborhoods you like and one who sells the types of houses you’re looking for. You may want to consider using a buyer’s agent. Be very clear about what you’re looking for. If an agent repeatedly shows you homes that don’t fit your criteria find a new agent to help you.
Oftendoing your own inspection can help you get a better deal. Each cracked window or leaky toilet you can find is a negotiating point. You see you could just make a low offer but a seller is more likely to accept your offer if you have reasons for it being lower. In fact you should attach a list of your concerns to the offer as an explanation and justification for your price.
Find out more below and Find your dream Home to buy.
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