| |
| |
|
Real Estate Information |
|
|
|
Investment Real Estate -- A New Twist: Be the Bank, Not the Landlord, and Get Rich Without the Work!
I was a landlord for a decade, and I believe I probably lost a year of life for each year I tried to maintain 26 properties. I learned the hard way that the most efficient way to make money in investment real estate is to create a mortgage note and be the bank - not the landlord. In other words, you become a private bank, financing the entire sale or part of the sale for the buyer. When you finance a sale of property, be sure to get a high rate of interest - generally 9% to 15%, depending on all of the other terms. For this article, let's assume you sell to someone who can't come up with all of a $20,000 down payment, so you finance $15,000 of the loan. The note should be due in five to 10 years, meaning the buyer will likely sell or refinance his mortgage within that period, and you'll be paid in full. Here's how financing a portion of a mortgage can be extremely profitable and far less work than being a landlord, who is responsible for property maintenance. Let's assume you charge 11% on your $15,000 loan, amortized over 30 years (this makes for an easier payment and a more attractive deal for the buyer, even though you're receiving a very high rate of interest on the loan). The payment is $142.85, which includes principal and interest. Now, you could make it even more attractive for you by writing the note with monthly payments of interest-only at 11%. This saves the buyer even more, as his payment becomes $137.50, but this does not amortize, or reduce, the $15,000 he owes you. Let's assume the note is due in 60 months. You get $8,250 during this five-year period, and in the 61st month, you get the entire $15,000 that you originally loaned. As you can see, this is a very powerful investment, as you loaned $15,000 but you received a total of $23,250. One final point. Maybe you are three years into receiving your $137.50 (meaning you've collected $4,950 in payments). Now, you decide you need a large sum of money for something - say, a vacation, home improvement, college tuition, or some other investment. You are still owed two years worth of payments at $137.50, or $3,300, and the balloon payment of $15,000. You have several great options, because you have the power of controlling a lot of money. You can actually sell your entire note at a discount to a note investor. That's right, there are people and companies all over the world that purchase mortgage notes (the actual payments that are due on a real estate transaction). The note you have, even though there are only two years left, would be highly attractive to an investor, because the payments are interest-only and because there is a $15,000 balloon payment due in 24 months. Now, remember, note investors are out to make money, so they won't offer you full price. They will either buy your remaining payments, probably for a discount of 10% to 20%, or they might purchase just the balloon payment, at the same discount, leaving you the remaining payments, or they might buy both the payments and the balloon. So, assume you need $11,000. If you could get an investor to purchase your remaining payments and your $15,000 balloon for $12,500, I would think you'd be extremely satisfied. Remember, you've already made nearly $5,000 on your loan, so you'd wind up making nearly $17,000, and you don't have to worry about collecting the payments any longer. Plus, you will get the "hot" cash that you require immediately. As you can see, financing part of the sale of a piece of property is an extremely solid investment. These examples are just a few of the many ways to own mortgages, not property, and get rich without the headache of being a landlord. If investing in real estate notes is something you would like to try, you might want to consider starting small, like with a mobile home note. These can be very inexpensive to buy but are extremely profitable. Mark Barnes is the author of the new novel, The League, the first work of fiction, based on fantasy football. He is also an investment real estate and home loan finance expert. Learn more about his suspense thriller at http://www.sportsnovels.com Get his free mortgage finance course at http://www.winningthemortgagegame.com
MORE RESOURCES:
Real-Estate - Google News |
|
|
|
RELATED ARTICLES
Investment Real Estate Made Easy - Make the Most from Each Investment Dollar When it comes to buying investment real estate, there are many schools of thought on how to get the most out of your money. Some say lease optioning your houses is the best and safest way to go. Listing Real Estate Online - Top Tactics for Boosting Sales Listing real estate online can be a great way to let buyers know what is out there and it gives sellers a chance to show their home to people all over the world. However, the problem lies in the fact that most people still want to tour the home, inside and out, before buying it. Are You Trying to Hit a Home Run With Your Prospects Without Asking Them on a Date? Real Estate email marketingDo you remember the old School girl/boy game of "Around the World", or "Around the Bases"? If you got a kiss you got to First Base. A french Kiss was Second Base. New Home Construction - The American Dream or The American Nightmare? Buying a new home is suppose to be the American Dream. Unfortunately, for many buyers of newly constructed homes it becomes the American Nightmare. Selling Your Property Without An Estate Agent It is possible to save £1,000s selling your home privately and cutting out the estate agent, but what are the issues that you need to consider?Pricing the propertyPrice your property too low and you could short-change yourself from the true market value, price your property too high and you will simply put off potential buyers.Before you put your property on the market, you need to do some market research. The Devine Secrets Of The Ya Ya Lease Purchase Hood The biggest secret of conducting a successful lease purchase business is to have a plan. I know don't grown. Real Estate Investing Works In Your Area Too! I hope you had a spectacular weekend!Things have been going great here at Investor Wealth Academy,and we are very excited about some major developments coming down the line for us later this summer.More on that later. 5 Steps To Choose the Best Cincinnati Realtor Excluding some professional real estate agents buying a house is a lifetime decision for most people. Whenever a person is decided about purchasing a house he is ready to invest a hefty amount of his lifetime savings for acquiring the house. Buying and Selling Real Estate: Negotiating to Win-Win You don't get what you deserve - you get what you negotiate for.If you've spent some time on homekeys. Secrets of Making Money from Real Estate - Part 3 Great, now how do I actually INVEST in real estate?Investing in real estate will get easier the more you do it. The first deal may take some time, but like anything, the more you do it the better you'll become. Why Are Mortgage Notes Discounted Anyway? When real estate note brokers purchase partially paid notes, they pay the note holder a discounted price after factoring in the time value of money, the payer history, and property condition.If there is still a significant period of time left for the payer to make payments, the future payments are not worth the same amount in current dollars. U.S. Real Estate Sought By Foreign Investors Due to a Weaker Dollar The weak US dollar has been good news for real estate. Taking advantage of the favorable conversion rates, foreign investors are eagerly picking up real estate in major cities across the US. An Estate Planning Primer An estate plan can be designed by clients and their professional advisors to achieve the client's personal and financial objectives. Or, it can be an arrangement imposed upon survivors by state intestate succession laws if someone dies with¬out a valid, up-to-date will. When is the Best Time to Move? As Realtors, we are often asked, "When is the best season to move?" This is a tough question, one we cannot answer for you. Most people are asking about price, do they fluctuate throughout the year? NO. How To Sell A Home That Didnt Sell If your home has just come off the market and hasn't sold, don't be discouraged. The reason it didn't sell may have nothing to do with your home. Should You Accept A Full Purchase Offer For Your Note or Not? You could be facing a dilemma when considering payout options on selling your mortgage note! To accept a full purchase offer or a partial purchase offer is not always an easy decision.Sure, to take the full purchase option is an easy decision to make if you're holding a second position note on a property that doesn't have any equity after you add the first and second mortgages, but what if that's not your situation? Full purchase payouts can be good if your primary concern is to just get out of the note and be done with it. How to Find and Buy a Bargain House with Little or No-Money Down Real estate investors know how to make money buying distressed houses. Investors recognize that bargain houses offer the best way to make a return quickly. Home Buying Checklist - Windows If you are in the market to purchase a home, it can be easy to fall in love at first sight. Do so at your own risk. Making it affordable: Nine tips for first time home buyers It seems that everyone loves a good real estate story. The media is filled with reports about soaring property values and home owners of modest means becoming instant millionaires when they sell. Are Signs Important? Signage, though quite fundamental in nature, plays an important role in the home selling process. The Yard Sign should be two-sided, easy to read, and look great (defaced or worn signs can negatively impact curb appeal).
|
| home | site map | |
| Realty Web Services © 2007 | MesaSky Services |
