Financial Freedom Through Real Estate

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Real Wealth Through Rental Properties
2007-03-08 00:25:01
Since the market has cooled in many cities, many new investors are starting to panic because they are worried about how to now make money in real estate. They can no longer buy a property, slapped on some paint, and sell it six months later for a $50,000 profit. These investors are used to making money through quick appreciation or asset growth. This is really a secondary means of making money in real estate. The recent boom has given the false impression that property prices always go up. The key to building true wealth in real estate is through buying and holding. Good and consistent tenants can create wealth for you by paying for mortgage, insurance, taxes, and other fees through rental payments. The power of leverage also allows you to make huge returns by using the banks money. If you put $10,000 down on a $200,000 home, with 5% yearly appreciation, you will have 100% yearly growth of the money that you actually invested. With real estate you have many vehicles for cre...
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Certain Investment Ideas may be Illegal
2007-03-08 00:25:01
We can all agree that there are many ways to make money in real estate. You can buy a residential property and rent it out for a steady monthly income. You can purchase a commercial property and lease the space out the businesses for many years. On the other hand, you can acquire a fixer-upper, make some repairs, and resell it for a profit, or acquire a vacation property and rent it by the week to short-term visitors. Well as you embark on your journey of real estate investing, some moneymaking ideas may not be allowed by the local or county jurisdiction that the property resides in.For example, early in my real estate investing career I acquired a large property with many bedrooms and bathrooms. It was formerly used as convent. At the time, it was a good deal, so I made a rush decision to purchase the house. I dreamed of the cash flow I would receive from renting it to students on a per room basis. So, I proceeded without researching the state and county laws until after th...
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Interest Rates Affect Affordability the Most
2007-03-08 00:25:01
Now that the heated market is softening, many buyers seem to be waiting on the sidelines for the once high prices to decline even more. Their reasoning is that a lower price will ease the road to homeownership. Currently, prices have decrease and seem to be stabilizing. But, the true factor that affects affordability is interest rates, which is the most powerful component of the home-buying process. A drop in interest rates has a far greater affect on monthly mortgage payments than a drop in home prices. So, if home prices do happen to drop and if interest rates rise at the same time, that once affordable home will quickly become unaffordable. For example, a household with an annual income of $100,000 can afford a $450,000 home at an interest rate of 5.63%. With an increased interest rate of 6.7% (approximately 1% higher), that same family can only afford a home priced at about $399,411. The only factor that changed in this equation was the interest rate. This change in int...
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Tax Liens as a Safe Investing Option
2007-03-08 00:25:01
Most of you have heard about the tax lien sales either on T.V., books, or through friends. For those who may have cold feet about taking the jump into full-fledge real estate investing, tax liens may be a viable option. Tax liens are a more conservative, methodical approach to real estate investing. If done right, it is considered one of the least risky ways to invest in real estate. There are about $7.6 billion dollars in delinquent property taxes created each year according to TaxLiens.com. There are thousands of counties in the US that sell tax liens every year. Approximately 31 states currently issue tax liens every year according to the site. If you are considering this investment option, be sure to conduct the proper research. This will ensure you a good return (around 10% ? 15% per year) with minimal risk. With tax lien investing you are partnering with local governments to create above average gains on your money. The liens can be purchased for hundreds to tens of ...
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How to afford a Home with little money
2007-03-08 00:25:01
I run across many first-time homebuyers that have trouble coming up with money for closing costs or downpayment. This seems to be a hurdle on the road to homeownership for many people. But with decent credit (600 or above) you can qualify for many community programs that allow 100% financing at competitive interest rates.In addition to these programs there are a few tricks and techniques that one may consider when making a purchase.Technique 1:If you are limited to only 3% closing help from the seller (because of a particular loan program), consider asking the seller to pay for all state transfer and recordation taxes. This is customarily split between the buyer and seller in most states, but you can ask the seller to pay for the whole amount. This is usually not considered "closing help" by lenders. This can save the borrower an additional 1% of the total loan amount.Technique 2:If you secure a loan that is 100% financed, it is not necessary to purchase Owner's Title Insuranc...
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First-Time Homebuyers ... get those deals
2007-03-08 00:25:01
Now seems like the perfect time for the first-time buyer to step up to the plate and take advantage of the cooling market. A cooling market does not mean a bad market, just a return to a more normal market. Houses will continue to be sold ?. sellers will sell, buyers will buy, and homes will appreciate over time. All of this will just happen at a more normal pace as compared to the 2000 ? 2005 time periods. A normal market means that home buyers have more time to look around, compare homes, and make informed decisions. This was a non-existent phenomenon during the boom years. Many first-time buyers could not react quick enough to secure the house of their dreams. The quickened pace of home sales did not allow inexperienced first-time buyers to comfortably evaluate potential homes and make a decision in their best interest. Now sellers are giving more incentives and concessions to potential buyers. In addition, many first-time buyer and income-based programs are available t...
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2007 Foreclosures
2007-03-08 00:25:01
It is predicted that 2007 will be a big year for foreclosure sales. Nationwide foreclosures were up 35 percent from December 2005 to December 2006. This is according to RealtyTrac.com. The biggest culprits for this prediction of increased foreclosures are the combination of resetting ARMs and slowing home sales. Many Adjustable Rate Mortgages (ARMs) have reset in 2006 and will continue to reset in 2007. This is forcing homeowners with these loans to pay increasingly higher mortgage payments because of the ARMs? increasing interest rate. The slowing real estate market makes it more difficult for these owners to sell their homes before foreclosure sets in. Many of these homeowners are even unable to refinance into new ARMs because of credit issues, lack of equity, or an inability to qualify for today?s higher ARM rates.This is creating new opportunities for foreclosure investors, but you will definitely need to do your research. The foreclosure market is very different from the...
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