traditional ways of earn money in real estate They consist of buying a property and holding it while it appreciates for a long-term profit. The reason this form is good for some and not so good for others is that if you own the property, you are in effect becoming the owner, that is, assuming you can get tenants on the property. to rent the house and make the mortgage payments on the property to produce a positive cash flow.
When you become a property owner, you assume all responsibilities associated with maintaining the property so that it remains livable for the tenants who occupy it.
For example, the plumbing, wiring, heating, gas, water, and structural integrity of the property are all responsibilities of the owners.
As a landlord, you also assume certain risks and headaches such as non-payment of rent by the tenant, eviction proceedings, attorney fees, etc.
Now what if there was a way that earn money in real estate no cash, credit or risk? Earlier, I mentioned that you can make money in real estate by owning a property. Now I am going to talk about the control of a property. This involves signing a purchase agreement with the seller for a specified period of time, in which you can assign the purchase agreement to an investor and collect an assignment fee.
When you sign a purchase agreement with a seller, say for 90 days, the seller cannot sell the property to anyone else during this 90-day period. In effect, you control the property for 90 days or until you find an investor to assign the deal to. The investor then buys the property from the seller and you collect a transfer fee, usually this is 5% of the sale price of the property.
What if you can’t find an investor to assign the purchase agreement to?
within 90 days? A purchase agreement is a contract, in a contract there are allowable escape clauses that can be written into a contract to make it binding on the parties involved. Sometimes a seller will not want to settle with you because of escape clauses in the contract. It is common practice to leave a security deposit with the seller, which can be anywhere from $10 to $50, a small amount. This will make the seller feel comfortable with you.
Another agreement that can be made with a seller of a property is called an Option to Purchase Agreement. It is much like a purchase agreement but a little more flexible for the potential buyer.
You do not assume any risk of buying the seller’s property with a purchase option contract. If you cannot find an investor to assign the call option agreement within the specified time period, the option expires. The purchase option agreement is only an option, not an obligation to purchase the property. In this contract as in the purchase contract, you control the property for the specified time and the seller cannot offer it to anyone else.
Let’s say the purchase option agreement you have signed with the seller is for 60 days. You now have 60 days to find an investor to assign the contract to and collect an assignment fee. You will need to do your due diligence on the property. This means checking the property for any outstanding liens or judgments against the title to the property. You need to know that the property is insurable, you cannot get a mortgage if the property cannot be insured, that is the law. You will need to have the property inspected as above, by a licensed inspector in your county or state.
Great bargains can be found on properties that need to be rehabbed.
Let’s say comparable home prices in the area are $220,000
The owner has been living in the house for 20 years, which means there is equity in the property. Equity is always a good thing. There are ways to leverage the equity in a property in such a way that the property is purchased with you don’t have to give money up front. When inspecting the property, you see some structural damage, plumbing issues, the furnace is old and needs to be replaced, the walls are dirty, the floors are cracked, etc. Then you get free estimates from licensed contractors on how much it would cost to fix these problems. Always get a licensed contractor who can guarantee the job. Ask for references.
Keep in mind that you are taking no risk in rehabbing the home when you use a purchase option or purchase agreement, as you will be assigning the purchase option or purchase agreement to an investor from whom you will receive a transfer fee. With an option to purchase agreement, you receive your assignment fee immediately, regardless of whether or not the investor purchases the property. In a purchase agreement, you will be paid your assignment fee at the close of the deal.
Above, I mention the purchase of properties from FSBO’s which means For Sale By Owners. These are homeowners who are listing their properties themselves or pitched to a real estate agent. If you buy a property through a real estate agent, there is a commission of 6% of the purchase price of the house that must be paid by the seller.
Other great deals can be had with pre-foreclosure or homes in mortgage’s trialThere are many creative real estate techniques to help the homeowner stop foreclosure, save their credit, and also keep the homeowner in the home with creative financing.
Another method of making money in real estate is called dirty shorts.
The property is going to be repossessed, when it is repossessed it will go up for auction and be sold to the highest bidder. Bank repossessed properties offer the investor a great opportunity to make a good profit. Banks are in business to make money. When a bank has a property that is about to go up for auction, it stands to lose money. This is where the smart investor steps in and offers to take said property off the hands of the banks at a deep discount. You can learn more about this below.
I am not a real estate investor at this time. I am writing what I have learned from a real estate careers which in my opinion is the best anywhere. Some of the teachings in this course cannot be found in the $4000 real estate boot camps that many people attend. At $29, this course is a must for anyone who wants to learn how to make a profit in real estate without cash, credit, or risk. If you really want to learn how to make a profit in real estate without cash, credit, or risk, I suggest you check out this package. Find and assign [http://www.willies-wholesale-warehouse.com/findandassign.HTML] The method is the safest and fastest way to make a profit in real estate.
copyright – 2007