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Schemes
by: Jeanette Joy Fisher
You've seen the real estate guru advertisements for books, DVDs,
programs, seminars, and mentoring coaches promoting no-money-down
deals. Perhaps you've watched the infomercial on TV with the people
telling their stories of how they made millions investing in real
estate with no-money-down and cash back to the buyers.
Maybe you, like me and many others, have purchased books or
expensive systems based on these no-money-down and lease-option
investing schemes. Here's the rest of the story.
Perhaps you've seen an ad in your local newspaper offering a home
with 100% financing from the seller or a lease option. You should
know that the investor offering these types of deals makes money by
purchasing the property at a discount and selling the property for
an inflated price.
Lease-option real estate investors play the odds. They bet that most
people won't be in a position to purchase the lease-option home in a
year. So the investor seeks a hopeful tenant to make higher than
average rental payments, pay more move-in cash, and make the
investor's mortgage payment. Those tenants who do eventually
purchase the home paid much more for the home than the investor.
Many tenants never come up with a new mortgage loan to purchase the
property when the time runs out. Either way, the real estate
investor makes money.
First-Time Home Buyers
If you need to buy your first home to live in, these home-purchase
methods may help you if you have terrible credit and can clean it up
in time to finalize the purchase in a year. Just understand that
you're paying too much for the property and may not make any money
on appreciation. On the other hand, if you have strong credit, you
can purchase a bargain house with no money down legitimately.
Tips for Beginning Real Estate Investors
Don't buy overpriced property! Avoid 100% investor-financed "deals."
You will have to wait too long to make any money. Plus, the rental
income most likely won't come close to making the mortgage payment
for you.
Don't waste your money buying real estate guru books, DVDs,
programs, seminars and mentor-coach promoting no-money-down deals.
Would you buy a book on how to make a fortune on the Internet that
was written in 1995?
These out-of-date, no-money down schemes, tell you to look for home
sellers in distress who will let you buy their home for no-money
down with the seller financing the property for you. This system
worked last century. Today's home sellers know that they can get a
buyer who can get their own financing.
Plus, today's home sellers know that other sellers have lost money
selling with no-money down. They've heard the stories where home
sellers didn't get paid and had to foreclose on a property. They've
heard the stories where the investor-buyer rented the house to
tenants who trashed the property. They've heard the stories where
the investor-buyer collected the rent and didn't pay the home
seller.
To get started building wealth in real estate today:
1. Get your credit ready for mortgage financing. (Mortgage credit
differs from consumer credit.)
2. Buy right. Don't overpay for deals that sound too good to be
true. These schemes are too good to be true!
3. Guard your money. Don't get yourself in over your head with high
mortgages on rental properties that cause you negative cash flow and
jeopardize your financial well-being. The best way to do this is to
make sure you get the best mortgage rates on a bargain-priced
property.
You can buy investment property for little -- or even no-money down.
Get started by buying your home or a second home. Real estate
investing offers you the most tried and true way to build wealth
when you avoid investing schemes.
Copyright © 2005 Jeanette J. Fisher. All rights reserved.
About the author:
Jeanette Fisher teaches beginning real estate investors five easy
steps to find, finance and fix houses for profits. Free ebook on
fixing houses using interior design strategies for top-dollar sales,
http://www.doghousetodollhouse.com/
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