How to buy real estate and never need any money
I am listening to investors talking about how he buys more than 100 properties and can get 20 different bank loans. He details the details of the loan application, cross-mortgages, personal guarantees, consolidation of limited liability companies and various lenders to make money. He did a lot of work, not a lot of money.
Another investor has bought twice the real estate and explained that he never borrowed money – what is the difference between the two investors? The second investor can not actually borrow money, so he must be creative. When the 2007 to 2008 decline occurred, the first batch of investors were eliminated, there have been many foreclosures and extremely bankruptcy.
The second investor who borrowed money from other people went through the same market conditions, but because it was not his money, he did not lose any money or any points. After the vision has a 20/20 vision, and as a second investor boasted his experience, he did not mention that he had gone through two bankruptcies when he started the real estate investment career when he was dead.
Individuals, we sold every 12 of our investment properties in December 2006, just because the market boom and mortgage Set. This initiative is the result of creative financing techniques and the use of other people (OPM) for about 15 years to buy the real state.
According to the investor's ability to sell, he may talk that potential investors will lend his money to the sale of property even if he does not actually do any trade. In general, if investors have any form of record, investors are more likely to cooperate. If you tell people about your history of real estate investment, tell them the truth, not say your experience. This may lose some money, but it is better than raising the expectations of investors to an unreasonable level.
Your investor "safe money" competition is the savings account and deposit card. These bank instruments have a 25-year history low, so your costs are only in the range of 6% to 8%. I always offer 6% interest payments per month or 8% paid for the sale of the property.
For example, borrowing $ 100,000, paid 6% on a monthly basis, paying only $ 500 for interest. In the same period borrowing $ 100,000 for six months, the amount of interest paid is $ 4,000. Payment of interest at the time of settlement contributes to the cash flow of investors during recovery and sale. Often, insiders will choose 8%, while less trustworthy lenders want to see a month's check to ensure safety.
In summary, becoming a long-term successful real estate investor with minimal personal risk will need to use other people's money to do your target attributes buy. Most people will initially let you down, but keep in touch and tell them your progress, the most common greed will bring you. In the worst case, some private lenders may want more interest or part of the property profits. Stick to your guns what your offer is, but make sure you get very private lenders to raise money for your deal. Pay attention to advertisements in newspapers because regulators can interpret them as unregistered public offerings.