When you think of real estate investing, one of two things might pop into your head. Buy and hold (rental properties) or buy and sell. Both of these are usually the traditional way of investing in real estate and may take anywhere from a few months to a few years until you start to realize profit. Within the recent years, real estate has taken a drastic turn and values of homes are as iffy as that day old Chinese left over in your fridge. One year a home can be worth 100K and then just six months later, four foreclosures in the neighborhood has brought the value down to 40K. Now you’re upside down. Your 2 year plan has turned into an indefinite 5, if that. So what’s a budding new investor suppose to do? What direction should you take your investing and maybe even business?
What type of property should you invest in? There are a number of types of commercial real estate properties; Apartment building, office building, retail buildings, mobile home parks, self-storage units, mobile home parks, an existing business, and many more.
So the doctor to whom this house was being flipped was either stupid or fictitious. It didn’t matter, unless there was $600K in cash on the table, there would be no sale. No bank would accept an appraisal of $600K for a loan on this house, even in pristine condition.
Finally, the absolute best way to finance properties is with private lenders. These are every day individuals who have their money in low yield investments who are willing to make Real Estate Finance estate loans in exchange for the much higher interest rate with security.
I have been doing this for almost two decades and the one thing that stays in the front of my mind is how I can put this deal together where everyone wins & I make a profit. It’s all about the deal & you should have several going on at one time to give you the most opportunities to close deals & get the reputation that you are the guy that delivers. When that starts happening, and it will if you follow the system, the money will follow automatically. Worry about the deal more than the money and success is yours.
If your outcome is to have an income of $100,000 per year without any work, you may choose to buy and hold enough rental real estate that will provide that.
If this luxury home is your second home, make sure it is significantly far from your house. The location matters because why would you have one that is too close to your regular home? Depending on the distance, it will be considered another home, or a second home. Your realtor will be able to help you with your options and deciding on location and what that will mean for you financially.
One thing that’s blatantly missing is: private money. If you could ask them, how do much do you think these other business finance solutions owners would have jumped at the chance to have a private investor finance all or part of their investment? They would probably look at you like you were crazy!
The ‘subject to’ method of buying homes allows the investor to achieve financial freedom with little risk property development funding great rewards. It takes little money to get started buying homes ‘Subject To’ and, is quicker and easier to sell a home when the banks are not involved.