Real estate investing is always good if done right. Certainly there are times where it is better during downturns or low interest rates like today. Most of the wealth in this country has been in real estate.
Most real estate investors start by spending thousands of dollars on a course that promised a life of real estate success and wealth.
It may startle you to learn that of those thousands of attendees to those real estate seminars around the country only about 5% of those end up buying even one investment property.
Why do you think that is? The real estate gurus only profess the upside and make profiting from real estate sound guaranteed. The fact that it really is simple is beside the point but believe it or not it is easy. Below is a quick plan that will enable to to build your success in real estate and your financial freedom.
Here Are Your Four Steps To Investing In single Family Homes
Be sure to purchase your investment property below full market value. The fact is that many homes are sold today well below full market value. The key is to understand that most homeowners when they are ready to sell want to be assured of a closing. A cash offer frequently sees a 10-20% discount to market offer current value. So all cash offer with a quick close is one way to achieve a good purchase price.
Locating homeowners in financial distress. Homeowners that have no choice but to fire sale their property. There are many reasons for this. The bread winner may have lost their job, have to leave suddenly due to a transfer, a divorce, medical bills or a drug habit that has caused them to lose their money.
These are all motivated sellers that will take below market prices for their homes.
How To Locate Motivated Sellers?
With hard work!! Just like any business it is important to develop a marketing plan. One that is simple and effective is a technique used by the Fuller Brush Company over 75 years ago who used door to door sales to build their business. it may sound antiquated but it is a technique that still works and works well. Like all sales it is a number game and to make a sale you have to hit the numbers. Just working at the door to door a few hours a week will allow you to hone your sales skulls, teach you to handle objections and help you close sales. When you have an interested party they have a problem that you are there to try and help resolve.
Whether it is medical, financial or other by purchasing their home you are helping to solve a problem for them. You can watch public notices for the announcement of foreclosure sales. Watching for these notices and meeting with a homeowner right after they receive this notice can provide a buying opportunity.
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.
How To Frame The Right Offer?
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.
You Make Your Profit When You Buy!
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. Know your market and always negotiate your purchase to buy the best you can.
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.
To buy right you need the best real estate financing for your investment properties. At CambridgeHomeLoan whether you are a first time investors or experienced builder or commercial real estate investor we can help you with the best rates and terms for your investment properties.