Real Estate Investing By The Numbers

Just like most things real estate investing can be broken down into easy to learn step.

Step One - Learn the basics:

Ownership of real estate is evidenced by a valid deed. When you buy property the seller signs a deed that transfers his ownership interest to you. Most states use a Warranty Deed. With that deed the seller warrants that title to the property is as he has described. You would buy title insurance in case some defect in title was discovered after the transfer of ownership. Recording the deed is notice to the world that you are the new owner.

You must know how to correctly fill out such basic documents as purchase offers, deeds, options, leases and rental agreements. Many of those documents have been recorded in your county and you can see many expert examples by viewing your County Recorders files.

If you have borrowed money to buy the property the lender will record a mortgage or trust deed immediately after the Warranty deed has been recorded. This mortgage is a lien on the property and gives the lender power to foreclose if you violate terms of the loan, like stop making payments.

Step Two - Understand how to buy real estate:

Most sellers want to sell their property for full price and all cash. Investors generally want to buy at a discount and delay paying for as long as possible. To do that you must understand the many techniques an investor can use to satisfy the needs of the seller.

You only make good deals if the seller is urgently motivated to sell. Perhaps he has lost a job, been transferred, has a drug problem, is facing divorce, bought more house than he could afford... or a variety of other reasons why he/she must get out from under those mortgage payments.

You can control real estate with leases, options, subject to techniques and a host of other "creative ideas". To be successful you must understand which technique to use in which situation. You just talk to the seller until you learn what he/she will accept.

Step Three - You must uncover a steady stream of motivated sellers:

They are always plenty of people who must sell their homes and sell them in a hurry. The trick is to find them. Since most people will so "no" to any offer but all cash, you need to be constantly on the search those motivated home owners.

My experience is that most new investors don't fail at investing... they fail at marketing. Marketing is how you sell you skill as an investor and find enough motivated sellers to keep the cash rolling in.

You can use billboards, flyers, telephone calls, door to door canvassing, bandit signs, newspaper ads, Web sites, direct mail... or any combination. If you don't use good marketing every week of the year your chances of becoming a successful investors are minimal.

Good marketing is the secret. You can be expert at every creative buying technique in the book. If you can't locate motivated sellers every week you just won't be able to buy houses.

Time and again we've seen people with just basic knowledge of one or two buying techniques become very successful, because they are unrelenting in their search for motivated sellers. Perseverance and stamina can work wonders.

My choice is to mail postcards, because they are inexpensive to prepare and send. You can read more about my postcard system at http://digbig.com/4cjxp

Step four - Always have an exit strategy before you buy:

Before buying an investment property you must carefully evaluate the potential for profit. One of the keys to your evaluation will be to determine what you will do with the property if you buy it.

Included in the many way to profit are:

1. Place it in your "buy & hold" inventory if it will produce profitable rental income.

2. Place it in your "buy & hold" inventory if it will produce break-even cash flow and you expect it to increase in value by 8% to 15% or more per year.

3. You can assign the purchase contract to another investor for a one time cash payment.

4. You can buy the property and immediately sell it to a retail buyer and cash-out.

5. You can exchange it for a more desirable property.

6. Refinance cash out and use the money for the down payment on another property.

7. Etc...

Finally

Now you can visualize the four basic steps in real estate investing. You'll never know all there is to know about every step. Just get started and add to your knowledge as you go along. Remember, all it takes to be successful is perseverance and stamina!

Mark Walters is a third generation investor who shares his experience at his Web site: http://www.CashFlowInstitute.com

More than 40 states signed onto a proposed $25-billion deal with major mortgage servicers over faulty foreclosure practices. New York, Nevada and Delaware joined California in holding out for better terms.

More than 40 states signed onto a proposed $25-billion settlement with major mortgage servicers over faulty foreclosure procedures, but California, New York and other key states were still not among them.

California has until Monday to share in a multi-state deal with banks to obtain mortgage relief and reforms. Atty. Gen. Kamala Harris, who walked away from talks last year, says the door remains open.

With a Monday deadline at hand, California officials have resumed direct talks with the Obama administration about joining a multibillion-dollar, multi-state mortgage settlement with the nation's largest banks, a source said Sunday.

The talk show host pays $12 million for the 4,088-square-foot house with four bedrooms and four bathrooms. The ocean-view home sits on 1.26 bluff-top acres with beach access.

In one of the more talked-about transactions in town, actors Brad Pitt and Angelina Jolie have sold their Malibu beach house to daytime host and comedian Ellen De Generes for $12 million.

The four-bedroom, five-bathroom house built in 1920 for industrialist James Wigmore lists for $2,875,000.

A decorative cast stone entrance opens to this restored Spanish Colonial Revival-style house in Pasadena's South Orange Grove area. Built in 1920 for industrialist James Wigmore, the house retains such original details as coffered wood ceilings and arched doorways.

They don't believe they can sell their property for what it's worth, so they're spending money on making their homes more comfortable.

Do you fit any of these descriptions?

A biennial research report by the National Assn. of Realtors indicates that a handful of real estate agents and brokers and their clients either don't know the law or don't care to follow it.

When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves.

The president aims to help about 3.5 million people with good credit who are unable to refinance at historically low rates because their homes are worth less than their mortgages.

 

The White House hopes to help millions of homeowners lower their monthly mortgage bill with a $5 billion to $10 billion plan to set up a streamlined refinancing program for people who are current on their payments.

The Standard & Poor's/Case-Shiller index of 20 large U.S. cities fell 1.3% in November from October as foreclosures continue to drag down the housing market.

Three straight months of home-price declines in the biggest U.S. cities showed that foreclosures remain a significant drag on a housing market that is entering its fifth year of deterioration.

L.A. Clipper Chris Paul may be quick down the court, but he moves pretty fast when it comes to buying multimillion-dollar real estate too.