Steps to Freedom: Buy Real Estate

Showing posts with label Buy Real Estate. Show all posts

Thursday, January 5, 2012

Should You Consider Rent to Own?
Should You Consider Rent to Own?
By Jacquelyn B Marks
Rent to own homes present a perfect solution for homebuyers and sellers when it comes to the surplus of pre-foreclosures, foreclosed and REO properties along with stringent credit policies. This alternative offers cash-strapped homebuyers a chance to save on the down payment as well as increase their credit standing. On the other hand, equally cash-strapped pre-foreclosure sellers will be able to relieve himself or herself with the impending foreclosure with someone else assuming mortgage payments. Then ultimately, the new owners will take the property off one's hands.
While rent to own homes are no doubt an ideal alternative plan, the theory may not carry out in real life scenarios. If seriously considering this option, what are the key aspects to look for? Alternatively, is a rent to own arrangement ideal for you?
Ideal Factors that Can Work to Your Advantage
The great aspect of this trend is most of the underwater homeowners are now willing to take lesser upfront payments. This means a buyer or renter is at a lesser loss when deciding to push through with the purchase. In addition, with the flood of pre-foreclosures and foreclosed properties, one can take a pick from the numerous choices available. In most cases, home sellers who consider a rent to own purchase are actually well into the desperation stage.
Potential Risks
As with any type of real estate purchase, these arrangements come with its own set of risks. It is possible for the buyer to find out that the homeowner has actually stopped making the mortgage payments while property is under the lease term period. On the other hand, owners/landlords can also potentially end up with a tenant who is remiss in making payments on time and completing the purchase.
Who Should Consider Rent to Own?
Even with risks, one can foresee these arrangements becoming more popular in the upcoming years. It presents one of the best transitional steps to curing the housing market crisis. Despite the set of risks, it is still one of the better options available for both homeowners and homebuyers. If executed flawlessly, it can be the best pre-foreclosure deals one can find.
However, here are some of the factors that need to take into account:

Rent to own is not recommended for individuals who require time to repair their credit standing to make a purchase.
It is ideal if both parties involved have good track records or those who have something more at stake, such as a long time tenant, a family member or maybe a friend who is very interested in assuming the property.

A lease to purchase agreement should be prepared by an attorney or real estate professional to ensure the protection of the homeowner and potential buyer. Moreover, as we all know when it comes to dealing with contracts, the devil is in the details. This means one needs to take the necessary precautions such as knowing everything about the homeowner. By doing so, requesting for a home inspection and discussing thoroughly the stipulations of the agreement with a fully outlined 'conditions precedent.'
If one has a potentially ideal rent to own opportunity, go ahead and explore the possibility. If keeping oneself well protected all through the transaction process, it can turn out to be the perfect investment opportunity.
Renttoownhomes.cc is the leading online listing service for Rent to Own Homes.
Article Source: http://EzineArticles.com/?expert=Jacquelyn_B_Marks
http://EzineArticles.com/?Should-You-Consider-Rent-to-Own?&id=6739212

Wednesday, August 12, 2009

Make Money with Real Estate - starting from where you are!

Image by thinkpanama via Flickr

Make Money with Real Estate Starting from Where You Are

7 tips to make lots of money with real estate

Start From Where You Are

You can do this! I don’t care where you are no matter what you do right now you can build a real estate empire. If you will just take the steps outlined here you can be on your way to a life style that others only dream about.

What To Do First - Start Saving

The first step towards your life of luxury is to save. Each week or pay day, just set aside a certain portion of your pay. Soon you will have enough saved for a start on your investment journey.

A much quicker way is to use equity, either the equity in your own home or equity that you may be able to "borrow" from somebody else.

Of course that other person would need to be supportive of your property aspirations and be willing to let you borrow against that equity.

What To Do Next

Buy Your First Property! Buying your first investment property is the most important investment step you will ever take. It is a step towards your financial freedom. Once you have made it your perspective will begin to change, sometimes very quickly.

Using the deposit funds that you have now secured as above, look for a property that is attainable.

In addition to an attainable property tyhere are several other selection criteria you need to keep in mind. Further details on these can be found on the SELECTION CRITERIA PAGE.

Don't Ever Sell

Here is where a lot if would be property moguls, make their biggest mistake. They look for a cheap unit or house to buy and possibly fix up and then they sell it. Or maybe they wait for the right time in the property cycle to buy a nice properly and then they sell it. This is like killing the goose that laid the golden egg!

The whole point is that there is no other investment vehicle that

You may be thinking "How will I retire if I am never going to sell?"
Just before I answer that question, let me ask you this:
Do you think there is anywhere that you can put your money that will give you the benefits of property ownership? I'm sure you are already familiar with the numerous advantages that investment property holds over any other form of investment.

Long term tax advantages.

Price stability.

Capital growth that is consistent through property cycles.

Set and forget – investment real estate is a simple to manage and hold investment. You don't have to check the current price every day for fear of wild fluctuations.

Pyramiding Your Investment

With all of those advantages you will be wondering how you build on your initial investment if you are never going to sell. It's as simple as this, you use the value of that property plus some of the equity from a previous property to fund your next purchase. Then after a while, say a year or so, you do it again.

Don't underestimate the value of what I have just said, or just how powerful this method is. The important thing is to maintain your faith and confidence in the long term value of the property market.

The Power Of Compounding And Pyramiding

This is a powerful driver towards you making money with real estate.

Just as an example, say you bought a property now while prices are stagnant or in decline. Yes, yes I know it sounds counter-intuitive, but buying while prices are low is a really good idea!

Any way, so you bought a property worth say $300,000. A nice little 2 bedroom unit in a new complex near the centre of an up and coming town or city.

So you put up 5% deposit and borrow the rest. That means that you need to come up with cash or equity of $15,000. But then, and this is the exciting part, then you own a property worth $300,000.

If you have bought in an in demand area, you could reasonably expect that the property will experience capital growth of 5% to 8% in the next year. That will mean that by the end of year one your property will be worth between $315,000 and $324,000.

Whet you do NOT do with that increased value is spend it!!

What you do the next year is buy another property.

This is how you make money with real estate!

Let's examine what you would have at the end of the second year if you followed this plan. Your first investment property is now worth approximately $340,000 and the second investment property you have bought for $315,000 is worth $331,000.

   START OF YEAR ONE
          Starting investment or equity:  $15,000
          First property:                $300,000

   End of first year Property 1 value:   $315,000
                Newly Acquired Equity:    $15,000

   YEAR TWO
          Purchase second property:      $315,000
          (Higher price to account for increasing values)

   End of second year Property 1 value:  $340,000
   Less purchase price:                - $300,000
            Property 1 Newly Equity:      $40,000

   End of second year Property 2 value:  $340,000
   Less purchase price:                - $315,000
            Property 2 Newly Equity:      $25,000
                                         --------
   Your Total Newly Acquired Equity:      $65,000

If you continued with this plan, where every one or two years you bought another property, then by the end of year ten you may have 7 to ten properties.

Your first two or three properties would have approximately doubled in value and the median priced house that you were aiming to buy would be valued about $550,000 to $600,000.

Living Off Your Empire

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Monday, May 11, 2009

Using Owner Financing to Buy Real Estate - No Mortgage Necessary

Are you trying to sell your house without the desired results? Are you trying to buy a house but having difficulty with financing? If so this is probably the article for you. Why you might ask? Whether you are a buyer or a seller, owner financing could be the answer to your problem.

The increasingly-popular trend known as owner financing is when the owner, or seller, of the home finances all or part of the purchase of their house. Instead of paying a bank or mortgage, the buyer makes regular monthly payments to the seller. To some this process may sound a little weird when it's put in those terms. How about land contract or lease purchase agreements? Those are probably familiar to most people. Land contract and lease purchase agreements are more well-known types of owner financing.

What are the benefits to the buyer? Some, such as limited to non-existent qualification requirements are obvious. The approval decision is left to the seller and not to a bank or mortgage company with strict requirements. Others such as negotiable down payment and low closing costs are added benefits. Also, financing can be adjusted to the buyer's specific needs. Interest rates may also be lower or in some cases even non-existent. In the short and the long run owner financing can save the buyer hundreds of dollars and a lot of time and hassle.

What about the seller? Owner financing typically increases the number of interested buyers. The seller's monthly income is increased from the regularly scheduled payments. In addition to those benefits, the seller will probably pay fewer taxes for the additional monthly income than what would be required for a large sale.

So why not use owner financing? There are many benefits and no foreseeable problems. The buyer and the seller both benefit greatly from owner financing.

Many real estate investors know how to buy houses with Owner Financing. If you are interested in learning about buying, selling or renting properties using these creative strategies then check out these free resources for Real Estate Investing.

Article Source: http://EzineArticles.com/?expert=Wolfgang_O
http://EzineArticles.com/?Using-Owner-Financing-to-Buy-Real-Estate---No-Mortgage-Necessary&id=2322025

Steps to Freedom