Everyone wants to be successful, and making enough money to live the type of life they've dreamt of. But how many of those people who talk about making more money are actually doing it?
Do you think there are great big secrets when it comes to real estate that nobody wants to tell you? Maybe you have thought that it would be great to be able to make some money with real estate, but you don’t know the first thing about getting started? Maybe you were like me and bought every real estate course known to man, read every book, listened to every tape, went to every seminar, only to find yourself more confused than ever and still not knowing the step you needed to take to get started and really succeed as a real estate investor. Well, let me share some of my own personal tips with you-things that I didn’t get in any seminar, book or tape. Things I learned after I just jumped into and started doing it.
The first tip is that it isn’t as hard as you may think. Some people think they need to know everything first. The fact is that you don’t need to read every book and tape out there-you just need to get started. I learned way more once I was into the business than any book or program out there could have taught me. Its obviously helpful to have a mentor who walks the walk and has been where you are looking to go, but that biggest hurdle is just getting started and making the decision to just do it!
The second tip is that you don’t need to have a lot of money down to get started. Many new investors use a hard money loan to make their first deal. A hard money lender will lend you up to 65-75% of the after repaired value of the completed project, using the house as the collateral. After you purchase the home, you can then rehab, refinance and keep for long term cash flow, which is a great long term wealth building strategy. You can also sell it or lease option at that point as well. You can even pick up the property, and then wholesale it to another investor. There are many exit strategies. However, you must go in having an exit strategy in mind so that you don’t get caught in a short term hard money loan that you cannot get out of. I always recommend that my clients get pre-qualified for backend financing (Before they even get the hard money loan), so that they are sure that they wont get stuck in an expensive loan that will eat up all of their profits if they are unable to refinance out of it when the time comes.
Once you have the profit from your first deal, you can do a 1031 exchange in order to defer the taxes and then of course purchase your next profit producing property. What a great money making cycle! Wouldn’t you agree?
My third tip and one of the best tips that I can give you about real estate investing is to never, ever pay too much for an investment property. I like to keep my purchase price under 65% of the After Repaired Value (ARV). You can always check the values with your realtor, but I also like to double check the values with a trusted appraiser, especially when you are trying to determine what the ARV of a property is. Although, I would never buy a property by only checking the values online, you can use many different online services to check values. My favorite is www.cyberhomes.com which is a free service.
There is really no magical secrets in investing in real estate successfully! It’s all in the numbers and numbers don’t lie! Bottom line, you buy it right and you win! You buy it wrong and you lose. It’s that simple!
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