Real estate investing is always good and sometimes it's red hot.
When it's hot dozens of real estate seminars begin rolling
across the country and thousands of people spend thousands of
dollars for investing education.
It's startling to learn that of all those thousands of eager
folks who attend these seminars only about 5% buy even one
investment house. Why? The real estate gurus sell the "sizzle"
and make profiting from real estate sound easy. The truth is
that it's simple, but not easy.
Here's a quick plan that will enable anyone to begin building
financial independence.
There are basically four steps to investing in single family
homes:
1. Buy homes below full market value. Yes, people really do sell
homes for less than the home's full value. The key is to
understand that most home owners will only consider a purchase
offer that is all cash and within 5% to 10% of their asking
price.
The successful investor learns to find financially distressed
home owners who have no choice but to sell for less than market
value. They have lost their job or been suddenly transferred;
they are divorcing; they been living beyond their income; the
family has been overwhelmed with medical bills and, not
uncommonly these days, their money has gone to support a drug
habit.
Those are examples of motivated sellers. They have to sell and
they will accept something other than a conventional, all cash
offer.
2. How do you find motivated sellers? You work at it! Like any
business it is important to develop a little marketing plan. One
that is simple, yet very effective, is the one that was proven
75 years ago by the Fuller Brush company; door to door sales.
You are selling your skill as a home buyer to people who must
sell. Your are there when they need you and you have the skill
to help them solve at least part of their problem. With door to
door prospecting you will learn more and buy more homes quicker
than any other method. However, most people just won't walk door
to door for three or four hours per week. OK, there are other
ways.
You can watch public notices for the announcement of foreclosure
sales. Meeting with a home owner right after they've received a
notice that they are about to lose their home allows you to deal
with a very motivated seller. Other public notices that provide
buying opportunities include probate, divorce and bankruptcy.
You can follow the Homes For Sale listings in your local
newspaper or Internet site.
You can telephone the names found in these notices or, and this
is the least time consuming, send a postcard expressing your
interest in buying their property. It will produce buying
opportunities, just not as many as personal contact.
3. After you've found a motivated seller you must understand how
to frame offers that provide benefits for both you and for the
home owner. A good real estate investor quickly learns that this
is not a business of stealing property, but of solving problems
in a way that benefits the seller.
The home owner is in a tight spot of some kind and you can save
them from public embarrassment and, in most cases, give them at
least a little cash to get a new start.
No investor can afford to leave cash in every deal. No one but
Bill Gates has that much available money. You must use creative
techniques like, leases, option and taking over mortgage
payments. Little or no cash is needed for those deals. You can
find plenty of reasonable priced educational material on those
subjects in book stores or on EBay. The same education that
seminars sell for thousands of dollars.
4. You make your profit when you buy! Never make a purchase
until you've carefully determined exactly how you will get to
your profit. If you hold it as a long term investment will the
monthly rental income more than cover the monthly mortgage
payment? Will you sell the deal to another investor for fast
cash? Will you do some fix-up and sell the property for full
value? Will you quickly trade it for a more desirable property?
Have a plan before you buy.
There you have four steps that even a part-time investor can
execute in three to four hours per week. What's the missing
ingredient? Your determination and perseverance. If you will
unfailingly follow the plan for a few months you will be well on
your way to financial independence.
About the author:
Hans Hasselfors is the founder of SubmitYourNewArticle.com. Find
varied real estate articles in our article directory. Please
visit at: http://www.SubmitYourN
ewArticle.com
|
