Real estate blog
Thursday, April 05, 2007
Funding Your Rehab

There are so many ways that you can fund your rehabbing project. You will have to do your research with all of the many lenders out there. However, to get a loan for rehabbing is not as risky. Usually, the return on a rehabbing investment is two times the amount financed which always catches their eye. Lenders know that you will double your investment and most of the time pay the loan back in full very quickly or on time.

The most difficult part of funding your rehab is knowing where to begin. Usually, when first starting out, start out buying an inexpensive piece of rundown property with your credit card. I like buying and selling inexpensive homes because you don't have to put a lot of money into the home to fix it up. You can sell these types of homes to just about anybody because a lot of buyers out there today just want a roof over there head.

When using a credit card, however, make sure you still have enough to actually do the rehab and then sell it for a profit. Your profit may not have doubled the first few times but you should have a little something in the end. You can use this money to fund your next rehab and as you keep rehabbing, money will start sticking. You will soon have enough cash flow to fund your rehabs or enough money that you have paid on your mortgage that you have built up a lot of equity and you can start taking a second mortgage out on your home. Don't become homeless or anything but this will build your credit as long as you are making your payments on time and that you haven't applied for too many credit cards. The better your credit score is your chances of funding your rehab with a loan will increase.

Another easy way to fund your rehab would be to find a hard money lender. The key to your success is finding the right one. There are many hard money lenders that you can find on the internet. Just call around and ask for their requirements and let them know you are a take charge kind of person who has rehabbed for a long time. You have to take the first step and just ask. Another way is to network. Let other real estate investors know what you're looking for. There is somebody always willing to give referrals to lead you in the right direction.

I have fully explained how to fund a rehab in my educational system, Renovate Your Success TM. This system will teach you all of the information you need to start your journey to financial freedom with property rehabbing. I have also created products for the professional rehabber to take their business to the next level of success.

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Monday, March 26, 2007
Professional Real Estate Investors' Number One Secret Revealed

If you want to make money in real estate like a professional investor then there is one secret that you really need to know. This is the secret that will be the difference between you earning a nice little bit of profit or equity from your investment strategy and you making a killing from your investment property assets.

This secret is little known outside of the professional property investor circle – this secret is hardly ever divulged, revealed or explained - and yet it is the absolute, number one essential factor that every single professional investor applies to every single real estate investment purchase decision that they ever make.

And the secret is – professional property investors secure their future profit when they purchase…

What?

That makes no sense, does it?

Actually, it makes a wealth of sense, let me explain…

Depending on the investment approach that you take, you can work a property's purchase price right down and in so doing you immediately create greater room for eventual profit.

For example, if you have a large lump sum to put down as a deposit for an investment property why not split the deposit in two, three or four and use the power of OPM (other people's money) in the form of multiple mortgages to acquire multiple properties?

This will allow you to negotiate the purchase price down if buying from a single vendor on a new development for example - it's called leveraging and here's how it works in basic terms: -

If you have USD 100,000 to invest, instead of buying a single home for USD 100,000 you can buy four for USD 100,000 by putting a USD 25,000 deposit down and mortgaging the other USD 75,000 on each one. Chances are if you're such a strong buyer you can hit the vendor hard with an aggressive purchase offer – say, 'I'm going to take four properties off your hands today and I want a 5% discount on each and I want all white goods, air conditioning, carpets and curtains thrown in.'

At the end of the process you will have paid out USD 100,000 for four properties that you have bought for USD 380,000 and which are actually worth over and above the original asking price of USD 400,000 because of the extras you got thrown in. At this point you can simply resell immediately and have turned the original USD 100,000 into at least USD 120,000 without doing much work for it at all!

Alternatively – you can buy a property at auction, you can buy a repossessed home or you can buy the worst house on a decent street all well below market value. You can then work the real estate into an attractive home and resell via a realtor at top market value and turn an undervalued property into a capital returning asset.

Another approach is to target a housing development coming to the end of the development phase. Any properties remaining for sale where the original sales have fallen through or any pieces or real estate remaining unsold as a result of being on an odd shaped plot of land or having less than perfect views can be snatched from a desperate developer keen to get onto their next project for well below market value if you're in a strong position to make them an offer and buy immediately.

Even if you are not in the position to act so aggressively and quickly, never ever offer what a vendor is asking, bargain hard, negotiate down, get extras included and try and increase the value of a property in relation to what you're paying for it before you buy…this will put you in the professional property investor league and ensure you make a killing from your real estate assets rather than an mediocre return.

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