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You've seen the real estate
investment guru advertisements for books,
DVDs, programs, seminars, and mentoring
coaches promoting no-money-down deals.
Perhaps you've watched the infomercial on
TV with the people telling their stories
of how they made millions in
a real estate investment with
no-money-down and cash back to the
buyers.
Maybe you, like me and many others, have
purchased books or expensive systems based on
these no-money-down and lease-option investing
schemes. Here's the rest of the story.
Perhaps you've seen an ad in your local
newspaper offering a home with 100% financing
from the seller or a lease option. You should
know that the investor offering these types of
deals makes money by purchasing the property at
a discount and selling the property for an
inflated price.
Lease-option real estate investment play the
odds. They bet that most people won't be in a
position to purchase the lease-option home in a
year. So the investor seeks a hopeful tenant to
make higher than average rental payments, pay
more move-in cash, and make the investor's
mortgage payment.
Those tenants who do
eventually purchase the home paid much more for
the home than the investor. Many tenants never
come up with a new mortgage loan to purchase
the property when the time runs out. Either
way, the real estate investor makes money.
First-Time Home Buyers
If you need to buy your first
home to live in, these home-purchase methods
may help you if you have terrible credit and
can clean it up in time to finalize the
purchase in a year. Just understand that you're
paying too much for the property and may not
make any money on appreciation. On the other
hand, if you have strong credit, you can
purchase a bargain house with no money down
legitimately.
Tips for Beginning Real Estate Investment
Don't buy overpriced property! Avoid 100%
investor-financed "deals." You will have to
wait too long to make any money. Plus, the
rental income most likely won't come close to
making the mortgage payment for you.
Don't waste your money buying real estate guru
books, DVDs, programs, seminars and
mentor-coach promoting no-money-down deals.
Would you buy a book on how to make a fortune
on the Internet that was written in 1995?
These out-of-date, no-money down schemes, tell
you to look for home sellers in distress who
will let you buy their home for no-money down
with the seller financing the property for you.
This system worked last century. Today's home
sellers know that they can get a buyer who can
get their own financing.
Plus, today's home sellers know that other
sellers have lost money selling with no-money
down. They've heard the stories where home
sellers didn't get paid and had to foreclose on
a property. They've heard the stories where the
investor-buyer rented the house to tenants who
trashed the property. They've heard the stories
where the investor-buyer collected the rent and
didn't pay the home seller.
To get started building wealth in real estate
today:
1. Get your credit ready for mortgage
financing. (Mortgage credit differs from
consumer credit.)
2. Buy right. Don't overpay for deals that
sound too good to be true. These schemes are
too good to be true!
3. Guard your money. Don't get yourself in over
your head with high mortgages on rental
properties that cause you negative cash flow
and jeopardize your financial well-being. The
best way to do this is to make sure you get the
best mortgage rates on a bargain-priced
property.
You can buy investment property for little --
or even no-money down. Get started by buying
your home or a second home. Real estate
investing offers you the most tried and true
way to build wealth when you avoid investing
schemes.
Copyright © 2005 Jeanette J. Fisher. All rights
reserved.
About the author:
Jeanette Fisher teaches
beginning real estate investors five easy
steps to find, finance and fix houses for
profits. Free ebook on fixing houses
using interior design strategies for
top-dollar sales, http://www.doghousetodollhouse.com/
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