Real estate investing is one of the best investments out in the world that you can get into that can lead you to financial freedom. What makes it the one of the best you ask? Its one of the easiest investments to get into that has huge leverage potential, or at least in my opinion. You can even be in profit the second you purchase the property if you do everything right. How you may ask? There are a lot of people out there who are in a rush to sell their house and will take a loss on their house just to get their hands on the money faster. Everyone has a different reason to sell their house for less then the actual value, weather it be divorce which is the main reason for people selling their house for less then the value, or if its handed down to the children after a death, bankruptcy, fore-closer etc. Whatever the reason may be is not your concern, this is your turn to shine and take it as an opportunity! We are going to use an example of a house that is appraised at 200,000 but the owners are selling it for 150,000. The second you buy it, you are now up 50,000 dollars. Now you may not be able to just throw 150,000 dollars at a house though, since most of us don't have that much laying in our savings. We not go to the bank to ask for a mortgage for the house. They agree to do mortgage of 70 percent of the house value. They do not care what you are buying the house for but only the value of the house which is 200,000 so they would give you 140,000 for the mortgage. Now you need 10,000 only for the down payment, so we are going to go to the owners and ask for them to finance you for the down payment of the house. Let's say they agree to this, that's 150,000 you now have from investors, and is enough to buy the house without using any more of your own and you have increased your net worth by 50,000! Now should you sell it? No way, we are going to use that equity to buy our next investment property. Now the compound effect begins. You may think these types of deals are not out there but they are. The numbers behind finding a good investment property is to find one good investment property, you must look at 100 houses, put in 10 offers, you will get 3 people to accept your offer and get financed for one. Sounds like a lot of work, but for 50,000 its well worth it. People do this in a month. The best part is the more you do this, the more real estate agents will automatically call you when they have a deal like this since they know you will buy that day if its a great deal.
Now that is only one part of the real estate investing world. The other thing you are looking for when you but one of these house's is to create positive cash flow money after all expenses of the house. You will have to pay maintenance, property management, mortgages, damages, and other expenses. This is why most people are scared of investing in this market. People are always saying "well what if your roof needs to be replaced?". "Great!" I say, that new roof will bring up the value of my house more then what I put into it! Do we sell to see those profits? No! We mortgage the value that is now added to our property, now why stop there? Add a garage, paint the house, make the house perfect! Most of the time, you will only add value if you replace and add to your property. This also increases the rental price.
This is why I believe real estate is one of the best investments out there. You can buy a house using 0 percent money down in some cases, which is undo-able in the stock market. One problem is you can't sell instantly but you can still finance the house and receive money in a short amount of time. This momentum only gets faster as you start to purchase more houses and move up to bigger pieces of real estate. Now wait til you see the tax advantages to this market! It's unbelievable. I suggest for you all to read "Rich dad advisors: Real estate riches" to learn more about how you can succeed in this business but dont stop there, this is only one book. Hope I opened your mind to how you can get closer to financial freedom! Have a good day everyone and stay connected.
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