Successful Real Estate Investment – 4 Top Methods
- Article posted by Mike Lautensack
Thanks to the recent and most dramatic real estate market decline and the severe credit crunch (and recession) that followed, the banks have stopped lending money as they used to because of the fears of non payment and bad debts. Some people feel that financing has become difficult but that is not the case, financing still goes on. The difference is that nowadays there are more creative ways of financing, and the bank is not the only option anymore.
Flipping
This is a method that is gaining popularity among many real estate investors. For example say that you want to buy your dream house and it is currently up for sale but you do not have the required money available to make a down payment. The solution is simple you flip a property. Flipping involves buying properties that are being foreclosed (mortgage not completed therefore being sold), these properties are usually sold at cheaper prices then they are worth as the banks are looking to minimize loses. Buyers usually buy these properties and then either refurbish it or repair it and then sell it to make a profit on their investment. These types of properties are usually listed in the classifieds in the newspapers so buyers have to be aware of when such a property comes into the market and then pounce on the opportunity.
Going for options
This is a method of real estate financing in which the buyer and the seller agree on a fixed price for the property. Then the buyer is allotted a time period during which if he is able to fulfill the requirements of the agreement between himself and the seller and he has an option whether to buy the property himself or refuse to buy it. Although this method of finance was not popular before it is increasingly becoming common as banks and other finance lending institutions are not providing the same level of finance as they used to.
Seller finance
This is another new form of creative financing that is becoming more and more popular amongst investors. In this method the seller himself becomes the lender therefore eliminating the need for any financial institutions. In this mode of financing the agreement is made directly between the buyer and the seller eliminating any middle man in between and resulting in better communication between the two parties. The Seller finances the buyer so that the buyer can repay him in installments with the rate of interests and the scheduled payments time period being decided between the two. A proper agreement is usually drawn up by the seller to ensure that if the buyer cannot fulfills the requirements set by the seller then he would have to forgo the property and the previous payments that he has made will not be returned.
Renting out multi bedroom homes
Another increasingly popular method is to buy a property near universities and colleges as these houses or apartments are in very high demand due to the nearness of proximity to the universities and these are very highly sought after by the university students and they are even willing to pay higher then market price rent for such places in order to have their home nearer to the universities.
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About The Author
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to Real Estate Investing Blog.
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