Think Like a Millionaire: How to Invest in Real Estate

Many people fail to see that skills fade, but assets are forever.They don’t know their entire financial education in their lives is completely WRONG!Too many people believe that a good job, good skills, and a positive attitude will make them great wealth. The problem is that it just doesn’t work that way. People who make an hourly wage and an annual salary cannot build wealth. This is because their money doesn’t work for them, and instead they work for their money. This idea keeps them from understanding that the only way to build wealth is to invest in multiple sources of income that you don’t have to work for, but instead build yourself or purchase from someone else.Another misconception of multiple sources of income and passive income is that people assume government and financial institutions offerings such as the stock market, CD’s, and many other financial instruments are passive income. Most of the time however, unless it is a note or bond that pays you regular interest. It is not actually passive income or a stream of income. As a stream of income or passive income is income that you make every day, every month, and every year continuously as cashflow. Stocks and the like only make you money on the sale and never anything in the meantime. Meaning they don’t ever actually cashflow. For example, it is the same as purchasing a piece of fine art and hoping that it appreciates the longer you hold onto it. Which is risky and locks your money up from better uses.Real Estate as an InvestmentReal Estate is the King when it comes to creating wealth for people. No other offering has the traits and abilities like real estate does. It is constantly appreciating and gaining value. It is always in demand because people need a place to live. And most important of all, it is a real asset that isn’t going anywhere soon. Allowing you to borrow against it as collateral and even to write off all expenses and costs associated off on your taxes. Now let’s not wait a moment longer to get into Real Estate as an Investment.Real Estate You Can Buy as InvestmentsThere is so many ways to invest in real estate and the major differences comes to how much capital you will need to put down to purchase them. This could be as little as $40,000 -$50,000 to buy a condo outright, to only $10,000+ to purchase a $100,000 single family home, or to as much as $20,000-$30,000 to purchase a multifamily home (2-4 units). All of which are Residential and can be easily financed.Once you get past 4 units, small office buildings, and industrial properties. You’re going into commercial territory and have a lot more hoops to jump through as well as have to start working with commercial lending which can require sizable amounts of capital before they will lend. In the rear, is my personal favorite of mobile homes and parks. Which are hard to sell, but can cashflow in all sorts of amazing ways from lending on the mobiles themselves to charging them for renting the use of the land. All of which is taxed as land which is the cheapest tax rate you can have on property.· Condos/Flats – Condos and flats are some of the best to buy for cashflow as they give the best cap rates. The only issue comes on the resale as many can be hard to finance as an investment property, preventing a large portion of the population from being able to purchase them.· Single-Family Homes – Single-family homes are easy to rent, easy to sell, and easy to finance.· Duplexes/Triplexes/Quads – Small multifamily properties (2-4 units). These property types combine the financing and easy purchasing benefits of a single-family home with the cashflow benefits and less competition found in larger investments.· Small Apartments – Small apartment buildings are made up of between 5-50 units, they can make great cashflow, but can be very illiquid on the resale.· Small Commercial Office Space – Buying small commercial buildings and renting out office space to business professionals.· Industrial Properties- Manufacturing, warehouses, distribution centers, etc.· Mobile Homes – Inexpensive way to enter the world of real estate investing and can also experience significant cashflow.· Mobile Home Parks – The entire park in which mobile homes are situated on can also be bought and sold. Rent the individual lots to mobile home owners, and as well as have corporately owned and leased ones.Strategies in Finding Investment PropertiesJust as there are a million ways to skin a cat, there is a million ways to find properties for investment. Of the many ways to find the properties for investment. The most common ways are to find the owner directly and give them a cash offer, to find properties that are owned by a lender or bank that they want to get rid of at a discount, or purchase a lien on the property so you can foreclose on the property yourself.

Lease Options – Buying the property and “renting” it with the legal right to buy it later.

For Sale By Owners (FSBO) – Private owners sell their property themselves with a sign or newspaper advertisement, they may want to sell their properties at a discount to avoid paying a realtor

REO’s – Foreclosed Property owned by banks can be bought under market if the demand isn’t too high

Auction at the Courthouse Steps – During the process of foreclosure, a home is brought to the courthouse steps to be sold to the highest bidder.

Buying in Pre-foreclosure – Sellers on the brink of losing their home can be very motivated to sell their home and save their credit and their lives

Short Sales – A bank will often take less than the loan amount on a property to save from the hassle and costs of foreclosing and reselling.

Tax Liens – When homeowner’s refuse to pay their taxes, the government can foreclose and resell the property.

HUD Foreclosures – When a US government ensured loan is foreclosed on, it often becomes the property of the department of Housing and Urban Development.

VA Foreclosures – Similar to the HUD foreclosures, the US Department of Veteran’s Affairs sells their homes as well after foreclosing on one of their insured properties
Strategies in Buying, Renting, and Selling Properties:When you finally have the property in your grasp, there are many techniques you can use to maximize your return. Some properties are great for buy n’ holding. Meaning you buy them for cashflow, but are expecting to also make a sizable return on the resale due to appreciation. Next up is Fixing N’ Flip/Hold, which is finding properties undervalue and fixing them up to either hold onto for cashflow or to sell immediately for instant profit. Then there is Turn-key-Investing, this is where you find the property, turn it into a profitable cashflow and sell it as a source of income to a big fish investor. For Big Commercial, there is NNN leasing that entails having the company renting the property takes care of all the trimmings of the property and pays you for leasing the space. Another Buy N’ Hold strategy that can make decent money is to turn your Buy N’ Hold property into a Vacation Rental and charge 3x as much than a normal lease. Then there is hard money lending, where you finance others in their fix n’ flips, buy n’ holds, or primary residence.

Buy-N-Hold – Buy real estate, rent it, and hold it until the market is up and a great buyer comes along

Fix-N-Hold- Buy below market value, remodel to force appreciation, and held until the market improves and sell it

Fix-N-Flip – Buy well below market value, remodel to market prices, and sell it immediately to get your return.

Turn-Key-Investing – fix-and-flipper, but sells remodeled properties to out-of-town individuals seeking a good place to keep their money moving.

NNN Lease – Big Businesses rent the building and pay all costs associated with the building such as maintenance, taxes, insurance, and more. We can own these buildings for highly-passive income.

Vacation Rentals – Buying vacation property and renting it out off and on season (Snowbirds)

Cash Purchase, Sell on Contract – Buy properties and immediately re-sell them to buyers who may not be able to conventionally qualify for a mortgage. Collect a large down payment when using this method.
How to Finance:Financing is readily available to anyone who has a cash for a down payment. Below is the major ways you can finance your Real Estate Investments.

All Cash – Property with no mortgage attached is very stable and a safe return. May not be as great as when using leverage (like a mortgage)

Seller Financing – Seller owns a property free-and-clear (no mortgage), and can be negotiated with to find a finance deal

Unconventional Lending – There are many lenders who will lend on any deal you have as long as the number make sense, this can be anything from landlord loans, had money, and much more

Self-Directed IRA – If you have a 401(k), throw it out, it’s time to put that money in a self-directed IRA and make that money finally work for you than expecting some money manager who is just trying not to lose your money than make you any. You can use your money in your SD-IRA to do all the strategies in buying, selling, and renting.

20%-25% Down Conventional Investment Mortgage – buy a real estate investment through a bank. Come up with 20-25% down payment and have the bank finance the rest

10% HomePath Investment Mortgage- These loan types are only available on Fannie-Mae backed bank REOs, but can allow an investor to purchase the home for just 10% down payment with other benefits.

Home Equity Line of Credit (HELOC) – With significant equity in real estate, M&T can borrow a line of credit off M&T Real Estate equity.

Small Business Loans – Banks often will finance a line of credit or loan for small businesses- to include a real estate investment company
Conclusion:If you have the mind for real estate or want to hire someone who does. Then you should forego a large portion of your portfolio to invest in real estate. It easily as one of the highest returns than any other investment in the world, the only caveat, like anything else, is that you need to do it right to be successful.

Real Estate – What’s in It for Me?

As Americans, we have the opportunity to pursue our personal happiness and prosperity. For many people this means starting and running a business. There are hundreds of new business ventures formed every day across the country. In fact, experts estimate that there are currently over 25 million small businesses throughout the country generating new jobs and contributing to our economy.So, “Why invest in real estate?” Real estate investing is one of the easiest ways and historically, has been one of the most successful ways, to achieve financial independence. With a relatively small monetary investment and some sweat equity, it is possible to generate a substantial profit. Take a moment and consider the list of the richest 400 Americans in the world, as composed by Forbes magazine. Literally dozens and dozens of people on this list made their fortune in real estate. We certainly can’t guarantee that one day you’ll be on this list of the richest Americans, but we can teach you some of the principles these fabulously rich men and women used to achieve their wealth.Real estate investing has a bright future. Real estate in the US has been a solid investment vehicle for many years. Since World War II home prices have increased dramatically in the United States. There have been relatively brief periods in which the price of homes has declined, such as the current period, but over the long run real estate investing has been a very successful and lucrative endeavor for many people.Purchasing real estate is much more than just finding the right place to call home. In fact, one in four residential homes are bought as an investment property. While being a real estate investor is occasionally stressful, it can also be very financially rewarding.Investing in real estate has become increasingly profitable over the last fifty years and has become a common investment vehicle, although often misunderstood or underutilized by many. Real estate as an investment takes on many forms from single-family homes to multi-family apartment and condo complexes, or commercial properties including office space, industrial warehouses, and retail space. The investment can be purchased and owned directly, or through various kinds of partnerships and investment trusts.As we all know, real estate is often discussed in the news media. Frequently there are reports and statistical information pertaining to new home sales or “hot markets” across the country. Reports may show how interest rates affect real estate prices, and other complementary markets such as consumer finance and lending. There is always a great deal of hype in the media when it comes to real estate, and this hype and chatter can come from both reliable and unreliable sources.Do not get caught up in the chatter from news organizations about real estate values or interest rates. Instead, stay focused on local markets and other markets you may have a specific interest in. Just the same way a home in your neighborhood may be a great buy right now, consider and realize there are thousands of neighborhoods across America with thousands of homes that are just as good of deals as the one in your neighborhood.Do not let the media “noise” affect your emotions and decision-making, and thereby affect your potential profits. Many investors have gone against the grain and invested in real estate in what the media may refer to as a “less than desirable” area or market, and consequently have made personal fortunes.Using a stock market analogy, when would you suspect is the best time to buy stock? At a 52 week high? Sometime that can be a successful strategy, but more often you want to buy when a stock is trading well below its actual worth, which is more likely to occur when it is down or in a slump. The same idea applies to real estate. Many people are fearful about buying in a down market for many reasons, but mostly because prices are falling. This is due to the surplus of inventory in the marketplace. When a market is saturated with countless homes or properties for sale, it means that inventories are up. The basics of free market economics apply. When there is a surplus of property on the market, sellers are forced to adjust prices lower to attract potential buyers. This is the law of supply and demand. Buyers will only buy property at a price that they think is reasonable.With so many houses on the market, home-buyers and investors alike have an historic opportunity to dictate the price they feel is reasonable. This is what is commonly referred to as a buyer’s market. It translates into huge financial upside potential to those who recognize such an opportunity.

The “Real Estate Bubble” is a Hoax

Those who watch television and listen to the media long enough, more than likely will begin to hear about the real estate bubble and its affects on the national economy and stock market. Recently, the media has begun to talk about their theory that the bubble is soon to burst, and they have done an excellent job of creating a hype about their theory, which actually has no merit whatsoever. Before investors get taken away in a media hype that suggests the real estate bubble is going to break, one needs to get a basic understanding of the real estate market and how it works.First of all, it is important to understand that, in reality, there is no national real estate market. The real estate market is much more localized and can not be studied or judged on a national level. From state to state, and even from town to town, the real estate market is going to vary greatly, and it is a grave error to try to base your understanding of real estate on a supposed national market that does not exist.It is also important to understand that the real estate market as a whole neither explodes nor crashes. Real estate is a market that can go down in some areas while going up in other areas. Even when the market does appear to be going down in some places, much of the time it has only fallen flat instead of continuing to increase, which makes it appear like there is a problem with value going down. Even when the real estate market goes up or down, it takes a long time to see changes that occur across the board. While real estate prices do fluctuate and go through cycles, it is important to realize that the economy of a country is not going to crash if property values start to go down a bit or they hold steady instead of increasing.Some people tend to view the real estate market as they do the stock market, and the two are very different. The real estate market cannot be viewed as a national market, and much of the time, it is actually based on local economies and how they are doing. On the other hand, the stock market is based on national merit and the rise and fall of the stock market has very little to do with the price of real estate.In some communities, it is true that the price of real estate is going down, but if one looks closely, there are a variety of reasons that cause it to lose value. In some cases, it is simply the fact that a city has built too many new houses, which can make it appear as if the real estate market is going down. If you are going to invest in real estate, there are a variety of economic trends that you should consider to be sure that the market is going to stay strong in the area.One thing that assures a strong real estate market is the arrival of more and more immigrants to the United States every year. Another thing that assures a strong real estate market is the later age at which people are getting married. Many are not getting married until they are in their middle to late 30s and this is resulting in even more single people purchasing their own homes. The interest rates are also helping to keep the real estate market strong, and since they are lower than ever before, it is easy for people to get the home loan they need.Those who are interested in investing in real estate need to throw away the concept of the real estate bubble and the idea of a national real estate market. Broad statistics, including national, state, and even city statistics, will, in reality, be no help when you are looking for properties to invest in. It is more important that investors look closely at the real estate market in certain neighborhoods and communities and that they look at relevant material such as average prices in the area, number of times the property has been on the market, and how the sales prices have changed since the last year. Keeping your focus local and small will help you find the best real estate investment properties.While the media may be trying to convince people that the real estate bubble is about to burst and that there may be a real estate market crash, there is no proof to back this up. In some cases, people are not building as many homes as a result of this news and it is actually causing real estate prices to go up since the demand is high and the supply is low. Investors need to understand that the market need not affect how successful they can be as a real estate investor. Investors that understand how real estate works will be able to find great investment properties that will make them money.Being successful as a real estate investor does not depend on the market or the real estate bubble, but it depends on how good an investor is at their job. Those who take the time to study communities and to look at local statistics will be able to find the best places to invest. If an investor relies on the media, there may be failure in the future, but a well planned and well studied investment can lead to profit and success.