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Real Estate Information |
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Finance Your Real Estate Investment Properties
Unlike traditional residential real estate mortgages, real estate investment financing is way more creative and offers more options than you think. The golden rule in real estate investment is OPM (Other People's Money). I have enough money; shouldn't I buy my real estate investment for cash? No, I absolutely advice against investing large sums of cash into a single real estate investment. There are two reasons why not. First, you give away most of your profits by not leveraging your real estate investment. Second, it is far too risky to put every egg into one basket. Let me explain the leverage issue for a moment. I will give you an example of a $100,000 investment property that typically increases its value (appreciates) by 7% average a year. Maybe more, maybe less depending where you live. Paying all cash for this property will yield in a 7% appreciation profit plus the net profit from renting the place. Now you're looking at roughly 15% of returns. If you're conservative with your investments you might be satisfied with this kind of a return. These days you might get equal or better returns with other conservative investments minus the hassle of being a landlord. But you don't mind being a landlord, because you understand and utilize the leveraging method with financing your real estate investment. With the example above you will make roughly $15,000 a year in profits from your investment. Now let's take a closer look at what leveraging can do for you. Today a typical real estate investor can get financing as high as 95% - 97% of the purchase price. Occasionally 100% financing is available as well. But this would be totally unfair in this example to compare this with all cash purchasing. 15% return sounds like a lot, but wait till you see this. Let's assume that the rental income will cover all your expenses including the mortgage payments. Taking the same example from before your net return would be the 7% appreciation profits of your property. This would translate into a $7,000 a year profit. With a 95% financing in place you would get $7,000 return on $5,000 (your 5% down payment) invested. This is a whopping 140% return on investment. With the same $100,000 you can go out there and get 20 investment properties, finance 95% of it and make an amazing $140,000 profit a year. This beats the projected $15,000 profits with an all cash transaction any day. Of course you will have a lot of trouble to get financing for 20 properties in a single year. Typically 5-6 new rental property mortgages are the maximum lenders will allow these days. This is the signal to get creative with your financing structures. In this case sellers financing would be your key to achieve your goal of maximum leverage of your investment dollars. Despite the message from all these late night infomercials, seller financing is harder to get than they want you to make believe it is. It all depends on the seller's ability to offer seller financing and the seller's motivation. Only about 1 out of 20 properties for sale are able to get seller financing. That means that there's no mortgage balance on the property. From this narrow selection the seller must be motivated to sell under these conditions. This could be tax reasons, time constraints, personal reasons and many more. As you can see this translates into a lot of work to achieve your goals. But let me tell you one thing. This separates the tire kicker real estate investors from the real go-getters. Wouldn't you agree that a little bit of hard work and determination is well worth it to build a real estate empire? I think it is well worth the trouble and hard work. At the end of the day you keep building your real estate investment portfolio and sooner than later you will be able to cash in. Sincerely, Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.Learn more about real estate investments at http://www.suncoastrenttoown.com or send a blank email to mailto:suncoastrenttoown@getresponse.com
MORE RESOURCES: Jeff Bezos' secret $190M Seattle real estate empire revealed Business Insider I'm a Real Estate Investor: Don't Pay Off Student Loan Debt — Buy Properties Instead Yahoo Finance Real Estate Transfers ~ through Nov. 23 The Bedford Citizen Francisco Real Estate: Why Homeowners are Selling at a Loss The San Francisco Standard NJ real estate: $20M Alpine mansion for sale. See listing NorthJersey.com Dodge County real estate transfers Fremont Tribune Real estate transfers: Dec. 8, 2023 RiverheadLOCAL Eastern U.P. real estate remains stable despite shifting national trends Sault Ste. Marie Evening News RNR Real Estate Briefs – Texas & more Realty News Report Real Estate Transfers: August 1 - 15, 2023 The Owensboro Times Real estate: Foreign LLC buys Pizza Hut property in Perry Township Massillon Independent Real Estate Sales Include Wealth Management Center Complex, Ranch For Vets Jamestown Post Journal How a Kitchen Refresh Can Help Close a Real Estate Deal How a team approach brings sales, success Behind The Hedges McColly Real Estate Holiday Celebration 2023 | LaPorteCounty.Life LaPorteCounty Life Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties Dec. 10, 2023 edition MassLive.com Real Estate Transactions for Dec. 9-10 | News, Sports, Jobs Nashua Telegraph XPO buys Yellow's Real Estate For $870 Million The Real Deal OT Real Estate Spotlight of the Week: 4404 Fairbairn Court The Owensboro Times I'm a Real Estate Investor: Don't Pay Off Student Loan Debt -- Buy Properties Instead GOBankingRates Routt County real estate sales surpass $13.4M from Dec. 1-7 Steamboat Pilot & Today Chad Tredway Rejoins JP Morgan Asset Management as Head of Real Estate Americas | Chief Investment Officer Chief Investment Officer PTK spotlight: 50 commercial real estate projects to know in 2024 Arizona Big Media Real Estate Roundup, Retail Theft Arrests The Eastsider LA Jef Conn: From Lubbock commercial real estate to Texas Chairman of the Board Texas REALTORS KLBK | KAMC | EverythingLubbock.com Real Estate Transfer Dec. 9, 2023 | Records | messenger-inquirer.com messenger-inquirer Charlottesville real estate investor Phaedrus Acgtblu dead in apparent homicide - The Daily Progress Bezos Leaving Behind A Massive Seattle Real Estate Portfolio As He And Lauren Sanchez Plan Move Miami Yahoo Finance A Strong 2024 Market? Get a Real Estate Coach Now | Florida Realtors Greenwich Real Estate Inventory to Hit Zero in March 2024 Greenwich Sentinel Bay Area real estate: Where rent or mortgages hurt residents most San Francisco Chronicle Real Estate Property Transfers in Franklin for November 13, 2023 Williamson Source Coral Springs Real Estate Market Defies Economic Predictions • Coral Springs Talk Coral Springs Talk Chad Tredway Rejoins J.P. Morgan as Head of Real Estate Americas, J.P. Morgan Asset Management PR Newswire Real estate news: DoubleTree near South Coast Plaza, JWA getting a $12 million makeover - OCRegister What's a Real-Estate Fund Worth? Depends on Who's Doing the Math The Wall Street Journal Pacaso, The Real Estate Marketplace, Releases Report That Identifies Fast-Growing Luxury Second Home Markets Crowdfund Insider Could Bitcoin Cause Real Estate Prices to Collapse? DataDrivenInvestor Viral New Berlin jungle home back on market after sale fell through: Open House - Milwaukee Business Journal The Business Journals Is Jeff Bezos shopping for real estate in Palm Beach? The New York Post thinks he is Palm Beach Daily News Wheeler Development exec balances careers in real estate, folk music - Crain's Grand Rapids Business Wheeler Development exec balances careers in real estate, folk music Crain's Grand Rapids Business Valley real estate community steps up to support Operation Santa Claus ABC15 Arizona in Phoenix REAL ESTATE | VIDEO | Charming and inviting 2-story home in West Bend, WI | By Wendy Wendorf, Homestead Realty washingtoncountyinsider.com New Castle News | Newspaper Ads | Classifieds | Real Estate for Sale | BERKSHIRE HATHAWAY Home Services The ... New Castle News San Francisco's Russian Hill Mansion Sells for Half Its Asking Price Amid Real Estate Shift Hoodline Canadian Apartment Properties Real Estate Investment Trust Un stock rises Friday, outperforms market MarketWatch Ares Banks $3.3 Billion to Buy Real-Estate Fund Assets - WSJ The Wall Street Journal REAL ESTATE BRIEFS: DEC. 9 Las Vegas Review-Journal Apply for the Longtime Owner Occupants Program (LOOP) | Services Philadelphia Water Department Opinion | Real-Estate Collusion Is Finally Coming to an End The Wall Street Journal What Accreditation Shift Could Mean for Real Estate Investors Kiplinger's Personal Finance New York City Law Against Body-Size Discrimination: What the Residential Real Estate Industry Needs to Know Jackson Lewis Gardiner nonprofit works to house teachers amidst 'uphill battle' of pricey real estate - Missoulian Jeff Bezos's Homes: Inside His More Than $500 Million Property Portfolio Architectural Digest 20 Young Leaders Transforming the Real-Estate Industry in 2023 Business Insider Are Virtual Tours Still Worth It in Real Estate? Evidence from 75000 Home Sales Harvard Business School Working Knowledge 9 Best Places to Retire in Mexico, According to Real Estate Experts Travel + Leisure How Real Estate Investing Led to a Seven-Figure Net Worth Business Insider |
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