One Day At A Time

Real Estate Finance Using Subject To Options

Real estate finance is one of our favorite real estate investing topics to write about.

Our students are always interested in new and intresting ways to finance their purchases of real property, so from time to time, we like to review some of our favorite strategies.

One of these is financing wholesale rela estate deals with “subject to options.”

Now, don’t let the fancy name intimidate you, subject to options aren’t as scary as they may sound, and they can really supercharge your real estate investing.

Typically the advantage to wholesale deals is that they can be turned over faster than retail deals.

If you give a low enough price that another real estate investor can come into the property, make a few upgrades or fixes and then sell it for a profit, then you have a larger market of potential buyers than if you are looking only for an end user.

When real estate investing with option contracts, all you do as a real estate investor is find a deal that you are interested in buying, negotiate a price with the seller, and then execute an option contract with the seller.

These deals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to option.

The subject to option gives you the right not only to purchase the property for a fixed price for a fixed period of time.

It also gives you the right to take over the property with its existing financing, meaning that as long as you’re willing to make the payments on the current mortgages on the property, you won’t need to go out and get new financing.

This is a powerful one-two investing strategy, because it allows you to contract a virtually limitless number of properties with very little money out of pocket (typically $10 for an option fee) and then to close on the properties without the expense, hassle or need for financing!

Thoughts

blog info

Real Estate Tips – Investing Successfully With Option Contracts

Anyone who reads our real estate investing materials and courses knows that we’re huge fans of real estate option contracts.

But, not everyone completely understands how get the most from your real estate investing when using this wonderful tool.

Options basically give you the right to buy a piece of real estate for a fixed price for a fixed period of time.

You can buy the property any time during the option period, but when the option expires, you have nothing, and you lose any funds you put up to acquire the option.

Many people use options when wholesaling real properties (buying low with the intent to flip for a slightly higher price to another real estate investor).

However, options are not limited to wholesale deals. Real estate option contracts can also be used to acquire an equitable interest in a property that you plan to market and sell to an end user buyer.

The choice is yours, and don’t forget to use options for both wholesaling and retailing your real estate investments.

Thoughts

blog archives

Real Estate Market Permits Everyone To Benefit, Even The Small Investor
Real estate investing has always provided a great deal of opportunity for investors. Weve all heard why its an IDEAL investment. Income, Depreciation, Equity, Appreciation and Leverage.

But, is it still a good idea to think of real estate investing real estate as an investment today, in the current market, with all the changes, challenges, bank failures and the whole mortgage meltdown mess?

The answer may surprise you.

There are many opportunities to profit in real estate today. Its possible to purchase homes at huge discounts to what they were selling even as recently as one year ago.

As you know, the whole secret to successful investing is to buy low and sell high, or at least higher than you bought in for!

Todays real estate market offers the perfect buy low, sell higher opportunity, despite falling real estate prices.
Why? Because prices are so very low right now, that you can buy properties at pennies on the dollar and still make money selling them at nickels on the dollar.

Thoughts

about the author

Real Estate Private Money Programs Offer Numerous Advantages

One strategy that real estate investors can use and really benefit from in their real estate investing, is to build up a warchest of private money lenders who they can go to whenever they need capital to buy a great deal.

We act as private money lenders to people whom we work with, and we also use private money lenders to help fund our deals when something wonderful comes along that we want to invest in.

Starting a private money lending program is not nearly as hard as you may think.

Investors of all sorts in all sorts of investments are always on the lookout for investments that pay high returns with low risk.Real estate investing fits the bill for these investors, because real estate offers a high return.

In fact, the return is high enough that there is an opportunity for a real estate investor to buy a property with expensive money and still make a return, despite paying a high interest rate to a private money lender.

Thoughts

blog archives

Real Estate Finance With Subject To Options

Have you ever used “subject to” as a tool in your real estate investing program?

If not, you’re definitely missing out on one of the best tools around for being able to acquire lots of investment properties for very little money out of pocket!Real estate investingdeals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to contract

A subject to contract has a huge advantage over other forms of real estate purchase contracts, primarily because with a subject to agreement, the financing is not an issue.

When you take a property subject to you are taking title to the property subject to the existing mortgage or financing that already exists on the property.

Sometimes, you may hear this referred to as a wrap or AITD (All Inclusive Trust Deed) type strategy.

In these deals, you dont need financing to take title, because you are just promising to pay the mortgage(s) that is/are already on the property.

Because you don’t have to go find the financing (and qualify for it), the only money you really need to do a “sub-to” deal is the money for the down payment, if any!

Many times, you can do a “sub-to” deal with only $10 – $100 out of pocket!

Thoughts

about the author

Real Estate Finance With Subject To Options

Have you ever used “subject to” as a tool in your real estate investing program?

If not, you’re definitely missing out on one of the best tools around for being able to acquire lots of investment properties for very little money out of pocket!Real estate investingdeals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to contract

A subject to contract has a huge advantage over other forms of real estate purchase contracts, primarily because with a subject to agreement, the financing is not an issue.

When you take a property subject to you are taking title to the property subject to the existing mortgage or financing that already exists on the property.

Sometimes, you may hear this referred to as a wrap or AITD (All Inclusive Trust Deed) type strategy.

In these deals, you dont need financing to take title, because you are just promising to pay the mortgage(s) that is/are already on the property.

Because you don’t have to go find the financing (and qualify for it), the only money you really need to do a “sub-to” deal is the money for the down payment, if any!

Many times, you can do a “sub-to” deal with only $10 – $100 out of pocket!

Thoughts

company info

Bank REO Inventory Changing The Game For Real Estate Investors

Wondering why lately your real estate investing opportunities seem to be a bit less than they were only about six months ago?

Well, the reason is clear and in the short run makes sense to banks holding large inventories of real properties that they foreclosed on during the recent mortgage meltdown mess.

It is true that lately banks have been amassing inventory, holding on to their REO foreclosed properties to avoid dumping them on the current real estate market at extremely depressed prices.

But it is inevitable that they will have to release these properties onto the market sometime.

And, when they do, we can expect to see even further declines in housing prices.

However, smart real estate investors, know that profitable real estate investing is possible in any market. It doesnt matter if the market is up, down or sideways.

Banks will eventually cave to regulatory pressure to get out of the real estate property holding business and back into the banking business.

When that happens, the current temporary shortage of high quality, low priced real estate investments will end and rela estate investors will see more and more good investment opportunities appearing around them

Thoughts

blog info

Real Estate Exit Strategies 101
Real estate investing is a whole lot easier proposition when you start with the end in mind.

The end I’m talking about here is the “exit strategy” or how you plan to get yourself out of a property to make money from the investment.

Many real estate investors go into real estate investing have no clue what theyre exit strategy, their plan of attack for making money from a property, is at the time they purchase properties.

They just purchase them because they seem like a good deal.

But theres a huge difference between buying a good deal and having an exit strategy.

If you purchase a property knowing that you already have a buyer, for example, that can be one of the most profitable forms of real estate investing.

Your exit strategy is to sell to a buyer you identify BEFORE you close on the property.

How do you do it?

Well talk about how you can go about doing just that in our next installment.

Thoughts

more info

Real Estate Private Money Programs Offer Numerous Advantages

One strategy that real estate investors can use and really benefit from in their real estate investing, is to build up a warchest of private money lenders who they can go to whenever they need capital to buy a great deal.

We act as private money lenders to people whom we work with, and we also use private money lenders to help fund our deals when something wonderful comes along that we want to invest in.

Starting a private money lending program is not nearly as hard as you may think.

Investors of all sorts in all sorts of investments are always on the lookout for investments that pay high returns with low risk.Real estate investing fits the bill for these investors, because real estate offers a high return.

In fact, the return is high enough that there is an opportunity for a real estate investor to buy a property with expensive money and still make a return, despite paying a high interest rate to a private money lender.

Thoughts

blog info

Real Estate Option Contracts Make Profitable Investing Easier

Want to make a lot of money through real estate investing?

One of the best and easiest ways to do just that is to learn about and start using real estate option contracts in your real estate investing transactions and deal-making.

How do you do it?

Real estate option contracts are nothing more than the right to purchase a property at a fixed price sometime in the future.

Typically real estate option agreements will provide a term of 30 days to as long as 5 years or more to exercise.
With an option contract, you have no risk going into a deal, and you also acquire an equitable interest in the real estate which permits you to advertise it for sale to potential buyers.

This strategy allows you to find your buyers and fix your profits BEFORE you ever even close on the property in the first place.

Some real estate gurus refer to this as wholesaling because you are going into the property up front with the idea that you may not sell it to an end buyer.

That is, many wholesale properties are acquired by one real estate investor and sold to another real estate investor who plans to resell the property to someone who plans to live in the property and use it as their home.

Thoughts

about the author

Real Estate Tips – Investing Successfully With Option Contracts

Anyone who reads our real estate investing materials and courses knows that we’re huge fans of real estate option contracts.

But, not everyone completely understands how get the most from your real estate investing when using this wonderful tool.

Options basically give you the right to buy a piece of real estate for a fixed price for a fixed period of time.

You can buy the property any time during the option period, but when the option expires, you have nothing, and you lose any funds you put up to acquire the option.

Many people use options when wholesaling real properties (buying low with the intent to flip for a slightly higher price to another real estate investor).

However, options are not limited to wholesale deals. Real estate option contracts can also be used to acquire an equitable interest in a property that you plan to market and sell to an end user buyer.

The choice is yours, and don’t forget to use options for both wholesaling and retailing your real estate investments.

Thoughts

more info

Real Estate Investment Formula Reveals Basic Principles Of Age Old Wisdom

What is the ideal real estate investingformula?

Its pretty simple really buy distressed real estate and sell at retail prices.

Its as simple as that.

Young families can now find more affordable housing that until recently was way beyond their budget.

True, with the mortgage bailout and all the fallout from it, credit is much tighter now and harder to come by, but savvy real estate investors are finding alternative sources of financing their real estate investingactivities.

Some of those alternative sources include private lenders, seller financing and renegotiating financing as a condition of purchasing short sales, defaulted paper or REO properties from banks.

Thoughts

blog archives

Private Money Is A Great Option For Real Estate Investors

You may have noticed that using subject to options is one way of getting alternative financing on your real estate investing properties.

Using this strategy, you can buy homes without limit because you are not forced to come out of pocket to finance them all.

Another strategy that real estate investors use in their real estate investing, is to build up a warchest of private money lenders who they can go to whenever they need capital to buy a great deal.

We act as private money lenders to people whom we work with, and we also use private money lenders to help fund our deals when something wonderful comes along that we want to invest in.

Thoughts

company info

Real Estate Finance Made Easy With Subject To Options

If you’ve been investing in real estate for any period of time, you probably know about, or hopefully have even used “subject to” and “option contracts” in your real estate investing activities.

On their own, both of these strategies have tremendous merit, but if you want to ninja supercharge your real estate investing, you need to read this article and learn how to blend those two strategies together and start using “sub-to options” to invest with.

Real estate deals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to option.

A subject to option has a huge advantage over other forms of option, primarily because with a subject to option, financing is not an issue, and neither are holding costs.

When you take a property subject to you are taking title to the property (or in this case getting the right to take title to the property) subject to the existing mortgage or financing on the property.

Sometimes, you may here this referred to as a wrap or AITD (All Inclusive Trust Deed) type strategy.

In these deals, you dont need financing to take title, because you are just promising to pay the mortgage(s) that is/are already on the property.

But, here’s the challenge with a straight sub-to deal. If you take a property “subject to” the existing mortgage and get the title, then you’re on the hook for mortgage payments, property taxes, upkeep and other costs and hassles.

On the other hand, if you take through a sub-to option, title does not pass. So, you aren’t on the hook for payments and all those other expenses.

Not only that, but if you negotiate your sub-to option well, you’ll probably be able to get into it for as little as $10 out of pocket.

Using this strategy, you can sub-to option dozens or hundreds of properties at a time, and your total out of pocket investment and carrying costs will be almost inconsequential!

Thoughts

about the author

Private Money Real Estate Example
Real estate investing using private money lenders is a great way to increase the number of properties you can buy, despite the cost of the money you borrow.

For example, lets say that you are investing in a REO and you can buy it for $90,000. But, the current market once you fix it up a little, spending $10,000 in fix up costs is $150,000, and lets say that the fix up and time to sell after total a period of 120 days.

That means that you can make $50,000 on your real estate investment of $100,000 in only 1/3 of a year.

The return on this investment, assuming no finance costs, then is 50% ($50,000 / $100,000).

And, when you annualize it, put it in terms of an annual return on investment, the return is even better.

In fact, because you were able to turn the property over in only 1/3 of a year, the annual return on your real estate investingis 3 times what you made, or, in this case 150%!#/BREAK#

#TITLE#Real Estate Private Money Examples

Thoughts

more info

Why We Like Subject To Options Best Of All

What type of contract or strategy do you use most often in your real estate investing business?

One of the most popular in our real estate investing circles is the subject-to option.

In a subject to deal, title changes, or the option is granted, on the property, but no new financing is required, because you just start making the payments on the property to the old lender who has the mortgage on it.

In a subject to option, its even better, because you let the seller make the payment s on the existing mortgage during your option period, and until you execute the option and take title to the property, you are not obligated to pay anything on the property.

That way, if you cant sell the real estate before a payment or two or three comes due, you are not obligated to make the payments.

And better still, if you cant sell the property at all and the option expires, you are not left with a loss from carrying costs during the time you were trying to sell the real estate.

So, we like options, and we like subject to options the best of all.

Thoughts

company info

Private Money Lenders Win With You When They Invest In You

Let’s look at an example of real estate investing with private money, and how everyone wins.

Let’s say you bought a house and fixed it up for a total of $100,000, and you sold it for $150,000, meaning you made a $50,000 profit, and you did it in 4 months.

If you also paid interest at 12% per year (1% per month) on the $100,000 you borrowed, you would pay $4,000 in interest for that 4 month period.

Now, remember, you made $50,000 on the deal. So, subtract the $4,000 in interest cost from your gross profit and youre left with a net profit of $46,000 from your real estate investing. Pretty cool deal isnt it!

Your private money investor is happy because they got 12% on their money, about six times the prevailing bank rates, and their money was secured by the property you bought with the money.

Not only that, but you made $46,000 too! Everyone wins.

Thoughts

blog info

Real Estate Investors Need An Exit Strategy When Buying Investment Properties

Want to know how to succeed at real estate investing?

What matters most is that you have an exit strategy in mind when you purchase your investment real estate property.

The biggest losers in real estate investing are people who purchase properties without knowing what they are going to do on the back end to make money from those properties.

What is an exit strategy for a real estate deal?

Great question! All exit strategy means is that you know what you are going to do with the property to make money on it AT THE TIME YOU BUY IT.

That timing is critical. You need to know how you are going to turn your real estate investment from investment to cash, from property to payday, at the time you buy it.

This makes sense too, doesn’t it? Rather than buying something you like or think may be a good investment, create a plan for how you are going to get rid of the investment to cash out, get paid and make your profit, and do that before you ever invest a dime in the property!

Thoughts

blog archives

Real Estate Wholesaleing Increasingly Attractive In Today’s Real Estate Market

We are often asked, “What is the fastest possible way to make money with real estate investing?”

Our answer is always the same, and it’s a strategy we use all the time in our own real estate investing, even though we’ve been investing in real estate for years.

The hands-down, no argument, absolute fastest way to make money in real estate is through buying a property low, at a great price, and then flipping it off to another real estate investor who can still sell it at a profit.

Some real estate gurus refer to this as wholesaling because you are going into the property up front with the idea that you may not sell it to an end buyer.

That is, many wholesale properties are acquired by one real estate investor and sold to another real estate investor who plans to resell the property to someone who plans to live in the property and use it as their home.

Wholesaling real estate is not a lot different from wholesaling anything else.

The trick is to buy at the right price, which means you really need to know the value of properties before you start your wholesale buying program.

The second trick is to build a strong list of real estate investor buyers so that you can turn your wholesale deals quickly.

This is necessary to make the most money possible, because you typically make a lot less flipping wholesale properties than you do selling to retail buyers.

Just remember, buy low and turn deals fast, and you can succed as a wholesale real estate investor!

Thoughts

blog archives

Real Estate Finance Using Subject To Options

Real estate finance is one of our favorite real estate investing topics to write about.

Our students are always interested in new and intresting ways to finance their purchases of real property, so from time to time, we like to review some of our favorite strategies.

One of these is financing wholesale rela estate deals with “subject to options.”

Now, don’t let the fancy name intimidate you, subject to options aren’t as scary as they may sound, and they can really supercharge your real estate investing.

Typically the advantage to wholesale deals is that they can be turned over faster than retail deals.

If you give a low enough price that another real estate investor can come into the property, make a few upgrades or fixes and then sell it for a profit, then you have a larger market of potential buyers than if you are looking only for an end user.

When real estate investing with option contracts, all you do as a real estate investor is find a deal that you are interested in buying, negotiate a price with the seller, and then execute an option contract with the seller.

These deals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to option.

The subject to option gives you the right not only to purchase the property for a fixed price for a fixed period of time.

It also gives you the right to take over the property with its existing financing, meaning that as long as you’re willing to make the payments on the current mortgages on the property, you won’t need to go out and get new financing.

This is a powerful one-two investing strategy, because it allows you to contract a virtually limitless number of properties with very little money out of pocket (typically $10 for an option fee) and then to close on the properties without the expense, hassle or need for financing!

Thoughts

more info

Real Estate Market Permits Everyone To Benefit, Even The Small Investor
Real estate investing has always provided a great deal of opportunity for investors. Weve all heard why its an IDEAL investment. Income, Depreciation, Equity, Appreciation and Leverage.

But, is it still a good idea to think of real estate investing real estate as an investment today, in the current market, with all the changes, challenges, bank failures and the whole mortgage meltdown mess?

The answer may surprise you.

There are many opportunities to profit in real estate today. Its possible to purchase homes at huge discounts to what they were selling even as recently as one year ago.

As you know, the whole secret to successful investing is to buy low and sell high, or at least higher than you bought in for!

Todays real estate market offers the perfect buy low, sell higher opportunity, despite falling real estate prices.
Why? Because prices are so very low right now, that you can buy properties at pennies on the dollar and still make money selling them at nickels on the dollar.

Thoughts

company info

Private Money Real Estate Example
Real estate investing using private money lenders is a great way to increase the number of properties you can buy, despite the cost of the money you borrow.

For example, lets say that you are investing in a REO and you can buy it for $90,000. But, the current market once you fix it up a little, spending $10,000 in fix up costs is $150,000, and lets say that the fix up and time to sell after total a period of 120 days.

That means that you can make $50,000 on your real estate investment of $100,000 in only 1/3 of a year.

The return on this investment, assuming no finance costs, then is 50% ($50,000 / $100,000).

And, when you annualize it, put it in terms of an annual return on investment, the return is even better.

In fact, because you were able to turn the property over in only 1/3 of a year, the annual return on your real estate investingis 3 times what you made, or, in this case 150%!#/BREAK#

#TITLE#Real Estate Private Money Examples

Thoughts

about the author

Bank REO Inventory Changing The Game For Real Estate Investors

Wondering why lately your real estate investing opportunities seem to be a bit less than they were only about six months ago?

Well, the reason is clear and in the short run makes sense to banks holding large inventories of real properties that they foreclosed on during the recent mortgage meltdown mess.

It is true that lately banks have been amassing inventory, holding on to their REO foreclosed properties to avoid dumping them on the current real estate market at extremely depressed prices.

But it is inevitable that they will have to release these properties onto the market sometime.

And, when they do, we can expect to see even further declines in housing prices.

However, smart real estate investors, know that profitable real estate investing is possible in any market. It doesnt matter if the market is up, down or sideways.

Banks will eventually cave to regulatory pressure to get out of the real estate property holding business and back into the banking business.

When that happens, the current temporary shortage of high quality, low priced real estate investments will end and rela estate investors will see more and more good investment opportunities appearing around them

Thoughts

blog info

Why We Like Subject To Options Best Of All

What type of contract or strategy do you use most often in your real estate investing business?

One of the most popular in our real estate investing circles is the subject-to option.

In a subject to deal, title changes, or the option is granted, on the property, but no new financing is required, because you just start making the payments on the property to the old lender who has the mortgage on it.

In a subject to option, its even better, because you let the seller make the payment s on the existing mortgage during your option period, and until you execute the option and take title to the property, you are not obligated to pay anything on the property.

That way, if you cant sell the real estate before a payment or two or three comes due, you are not obligated to make the payments.

And better still, if you cant sell the property at all and the option expires, you are not left with a loss from carrying costs during the time you were trying to sell the real estate.

So, we like options, and we like subject to options the best of all.

Thoughts

about the author

Real Estate Investment Formula Reveals Basic Principles Of Age Old Wisdom

What is the ideal real estate investingformula?

Its pretty simple really buy distressed real estate and sell at retail prices.

Its as simple as that.

Young families can now find more affordable housing that until recently was way beyond their budget.

True, with the mortgage bailout and all the fallout from it, credit is much tighter now and harder to come by, but savvy real estate investors are finding alternative sources of financing their real estate investingactivities.

Some of those alternative sources include private lenders, seller financing and renegotiating financing as a condition of purchasing short sales, defaulted paper or REO properties from banks.

Thoughts

blog archives

Real Estate Market Permits Everyone To Benefit, Even The Small Investor
Real estate investing has always provided a great deal of opportunity for investors. Weve all heard why its an IDEAL investment. Income, Depreciation, Equity, Appreciation and Leverage.

But, is it still a good idea to think of real estate investing real estate as an investment today, in the current market, with all the changes, challenges, bank failures and the whole mortgage meltdown mess?

The answer may surprise you.

There are many opportunities to profit in real estate today. Its possible to purchase homes at huge discounts to what they were selling even as recently as one year ago.

As you know, the whole secret to successful investing is to buy low and sell high, or at least higher than you bought in for!

Todays real estate market offers the perfect buy low, sell higher opportunity, despite falling real estate prices.
Why? Because prices are so very low right now, that you can buy properties at pennies on the dollar and still make money selling them at nickels on the dollar.

Thoughts

blog info

Real Estate Tips – Investing Successfully With Option Contracts

Anyone who reads our real estate investing materials and courses knows that we’re huge fans of real estate option contracts.

But, not everyone completely understands how get the most from your real estate investing when using this wonderful tool.

Options basically give you the right to buy a piece of real estate for a fixed price for a fixed period of time.

You can buy the property any time during the option period, but when the option expires, you have nothing, and you lose any funds you put up to acquire the option.

Many people use options when wholesaling real properties (buying low with the intent to flip for a slightly higher price to another real estate investor).

However, options are not limited to wholesale deals. Real estate option contracts can also be used to acquire an equitable interest in a property that you plan to market and sell to an end user buyer.

The choice is yours, and don’t forget to use options for both wholesaling and retailing your real estate investments.

Thoughts

company info

Real Estate Option Contracts Make Profitable Investing Easier

Want to make a lot of money through real estate investing?

One of the best and easiest ways to do just that is to learn about and start using real estate option contracts in your real estate investing transactions and deal-making.

How do you do it?

Real estate option contracts are nothing more than the right to purchase a property at a fixed price sometime in the future.

Typically real estate option agreements will provide a term of 30 days to as long as 5 years or more to exercise.
With an option contract, you have no risk going into a deal, and you also acquire an equitable interest in the real estate which permits you to advertise it for sale to potential buyers.

This strategy allows you to find your buyers and fix your profits BEFORE you ever even close on the property in the first place.

Some real estate gurus refer to this as wholesaling because you are going into the property up front with the idea that you may not sell it to an end buyer.

That is, many wholesale properties are acquired by one real estate investor and sold to another real estate investor who plans to resell the property to someone who plans to live in the property and use it as their home.

Thoughts

more info

Real Estate Finance With Subject To Options

Have you ever used “subject to” as a tool in your real estate investing program?

If not, you’re definitely missing out on one of the best tools around for being able to acquire lots of investment properties for very little money out of pocket!Real estate investingdeals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to contract

A subject to contract has a huge advantage over other forms of real estate purchase contracts, primarily because with a subject to agreement, the financing is not an issue.

When you take a property subject to you are taking title to the property subject to the existing mortgage or financing that already exists on the property.

Sometimes, you may hear this referred to as a wrap or AITD (All Inclusive Trust Deed) type strategy.

In these deals, you dont need financing to take title, because you are just promising to pay the mortgage(s) that is/are already on the property.

Because you don’t have to go find the financing (and qualify for it), the only money you really need to do a “sub-to” deal is the money for the down payment, if any!

Many times, you can do a “sub-to” deal with only $10 – $100 out of pocket!

Thoughts

blog info

Real Estate Investors Need An Exit Strategy When Buying Investment Properties

Want to know how to succeed at real estate investing?

What matters most is that you have an exit strategy in mind when you purchase your investment real estate property.

The biggest losers in real estate investing are people who purchase properties without knowing what they are going to do on the back end to make money from those properties.

What is an exit strategy for a real estate deal?

Great question! All exit strategy means is that you know what you are going to do with the property to make money on it AT THE TIME YOU BUY IT.

That timing is critical. You need to know how you are going to turn your real estate investment from investment to cash, from property to payday, at the time you buy it.

This makes sense too, doesn’t it? Rather than buying something you like or think may be a good investment, create a plan for how you are going to get rid of the investment to cash out, get paid and make your profit, and do that before you ever invest a dime in the property!

Thoughts

about the author

Real Estate Private Money Programs Offer Numerous Advantages

One strategy that real estate investors can use and really benefit from in their real estate investing, is to build up a warchest of private money lenders who they can go to whenever they need capital to buy a great deal.

We act as private money lenders to people whom we work with, and we also use private money lenders to help fund our deals when something wonderful comes along that we want to invest in.

Starting a private money lending program is not nearly as hard as you may think.

Investors of all sorts in all sorts of investments are always on the lookout for investments that pay high returns with low risk.Real estate investing fits the bill for these investors, because real estate offers a high return.

In fact, the return is high enough that there is an opportunity for a real estate investor to buy a property with expensive money and still make a return, despite paying a high interest rate to a private money lender.

Thoughts

more info

Real Estate Finance Using Subject To Options

Real estate finance is one of our favorite real estate investing topics to write about.

Our students are always interested in new and intresting ways to finance their purchases of real property, so from time to time, we like to review some of our favorite strategies.

One of these is financing wholesale rela estate deals with “subject to options.”

Now, don’t let the fancy name intimidate you, subject to options aren’t as scary as they may sound, and they can really supercharge your real estate investing.

Typically the advantage to wholesale deals is that they can be turned over faster than retail deals.

If you give a low enough price that another real estate investor can come into the property, make a few upgrades or fixes and then sell it for a profit, then you have a larger market of potential buyers than if you are looking only for an end user.

When real estate investing with option contracts, all you do as a real estate investor is find a deal that you are interested in buying, negotiate a price with the seller, and then execute an option contract with the seller.

These deals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to option.

The subject to option gives you the right not only to purchase the property for a fixed price for a fixed period of time.

It also gives you the right to take over the property with its existing financing, meaning that as long as you’re willing to make the payments on the current mortgages on the property, you won’t need to go out and get new financing.

This is a powerful one-two investing strategy, because it allows you to contract a virtually limitless number of properties with very little money out of pocket (typically $10 for an option fee) and then to close on the properties without the expense, hassle or need for financing!

Thoughts

company info

Real Estate Exit Strategies 101
Real estate investing is a whole lot easier proposition when you start with the end in mind.

The end I’m talking about here is the “exit strategy” or how you plan to get yourself out of a property to make money from the investment.

Many real estate investors go into real estate investing have no clue what theyre exit strategy, their plan of attack for making money from a property, is at the time they purchase properties.

They just purchase them because they seem like a good deal.

But theres a huge difference between buying a good deal and having an exit strategy.

If you purchase a property knowing that you already have a buyer, for example, that can be one of the most profitable forms of real estate investing.

Your exit strategy is to sell to a buyer you identify BEFORE you close on the property.

How do you do it?

Well talk about how you can go about doing just that in our next installment.

Thoughts

blog archives

Real Estate Wholesaleing Increasingly Attractive In Today’s Real Estate Market

We are often asked, “What is the fastest possible way to make money with real estate investing?”

Our answer is always the same, and it’s a strategy we use all the time in our own real estate investing, even though we’ve been investing in real estate for years.

The hands-down, no argument, absolute fastest way to make money in real estate is through buying a property low, at a great price, and then flipping it off to another real estate investor who can still sell it at a profit.

Some real estate gurus refer to this as wholesaling because you are going into the property up front with the idea that you may not sell it to an end buyer.

That is, many wholesale properties are acquired by one real estate investor and sold to another real estate investor who plans to resell the property to someone who plans to live in the property and use it as their home.

Wholesaling real estate is not a lot different from wholesaling anything else.

The trick is to buy at the right price, which means you really need to know the value of properties before you start your wholesale buying program.

The second trick is to build a strong list of real estate investor buyers so that you can turn your wholesale deals quickly.

This is necessary to make the most money possible, because you typically make a lot less flipping wholesale properties than you do selling to retail buyers.

Just remember, buy low and turn deals fast, and you can succed as a wholesale real estate investor!

Thoughts

blog info

Private Money Is A Great Option For Real Estate Investors

You may have noticed that using subject to options is one way of getting alternative financing on your real estate investing properties.

Using this strategy, you can buy homes without limit because you are not forced to come out of pocket to finance them all.

Another strategy that real estate investors use in their real estate investing, is to build up a warchest of private money lenders who they can go to whenever they need capital to buy a great deal.

We act as private money lenders to people whom we work with, and we also use private money lenders to help fund our deals when something wonderful comes along that we want to invest in.

Thoughts

company info

Real Estate Finance Made Easy With Subject To Options

If you’ve been investing in real estate for any period of time, you probably know about, or hopefully have even used “subject to” and “option contracts” in your real estate investing activities.

On their own, both of these strategies have tremendous merit, but if you want to ninja supercharge your real estate investing, you need to read this article and learn how to blend those two strategies together and start using “sub-to options” to invest with.

Real estate deals can be financed in any number of ways, but one of our favorite real estate financing strategies is to negotiate a subject to option.

A subject to option has a huge advantage over other forms of option, primarily because with a subject to option, financing is not an issue, and neither are holding costs.

When you take a property subject to you are taking title to the property (or in this case getting the right to take title to the property) subject to the existing mortgage or financing on the property.

Sometimes, you may here this referred to as a wrap or AITD (All Inclusive Trust Deed) type strategy.

In these deals, you dont need financing to take title, because you are just promising to pay the mortgage(s) that is/are already on the property.

But, here’s the challenge with a straight sub-to deal. If you take a property “subject to” the existing mortgage and get the title, then you’re on the hook for mortgage payments, property taxes, upkeep and other costs and hassles.

On the other hand, if you take through a sub-to option, title does not pass. So, you aren’t on the hook for payments and all those other expenses.

Not only that, but if you negotiate your sub-to option well, you’ll probably be able to get into it for as little as $10 out of pocket.

Using this strategy, you can sub-to option dozens or hundreds of properties at a time, and your total out of pocket investment and carrying costs will be almost inconsequential!

Thoughts

blog archives

Private Money Lenders Win With You When They Invest In You

Let’s look at an example of real estate investing with private money, and how everyone wins.

Let’s say you bought a house and fixed it up for a total of $100,000, and you sold it for $150,000, meaning you made a $50,000 profit, and you did it in 4 months.

If you also paid interest at 12% per year (1% per month) on the $100,000 you borrowed, you would pay $4,000 in interest for that 4 month period.

Now, remember, you made $50,000 on the deal. So, subtract the $4,000 in interest cost from your gross profit and youre left with a net profit of $46,000 from your real estate investing. Pretty cool deal isnt it!

Your private money investor is happy because they got 12% on their money, about six times the prevailing bank rates, and their money was secured by the property you bought with the money.

Not only that, but you made $46,000 too! Everyone wins.

Thoughts

more info

Private Money Real Estate Example
Real estate investing using private money lenders is a great way to increase the number of properties you can buy, despite the cost of the money you borrow.

For example, lets say that you are investing in a REO and you can buy it for $90,000. But, the current market once you fix it up a little, spending $10,000 in fix up costs is $150,000, and lets say that the fix up and time to sell after total a period of 120 days.

That means that you can make $50,000 on your real estate investment of $100,000 in only 1/3 of a year.

The return on this investment, assuming no finance costs, then is 50% ($50,000 / $100,000).

And, when you annualize it, put it in terms of an annual return on investment, the return is even better.

In fact, because you were able to turn the property over in only 1/3 of a year, the annual return on your real estate investingis 3 times what you made, or, in this case 150%!#/BREAK#

#TITLE#Real Estate Private Money Examples

Thoughts

about the author

Real Estate Tips – Investing Successfully With Option Contracts

Anyone who reads our real estate investing materials and courses knows that we’re huge fans of real estate option contracts.

But, not everyone completely understands how get the most from your real estate investing when using this wonderful tool.

Options basically give you the right to buy a piece of real estate for a fixed price for a fixed period of time.

You can buy the property any time during the option period, but when the option expires, you have nothing, and you lose any funds you put up to acquire the option.

Many people use options when wholesaling real properties (buying low with the intent to flip for a slightly higher price to another real estate investor).

However, options are not limited to wholesale deals. Real estate option contracts can also be used to acquire an equitable interest in a property that you plan to market and sell to an end user buyer.

The choice is yours, and don’t forget to use options for both wholesaling and retailing your real estate investments.

Thoughts

company info

Real Estate Market Permits Everyone To Benefit, Even The Small Investor
Real estate investing has always provided a great deal of opportunity for investors. Weve all heard why its an IDEAL investment. Income, Depreciation, Equity, Appreciation and Leverage.

But, is it still a good idea to think of real estate investing real estate as an investment today, in the current market, with all the changes, challenges, bank failures and the whole mortgage meltdown mess?

The answer may surprise you.

There are many opportunities to profit in real estate today. Its possible to purchase homes at huge discounts to what they were selling even as recently as one year ago.

As you know, the whole secret to successful investing is to buy low and sell high, or at least higher than you bought in for!

Todays real estate market offers the perfect buy low, sell higher opportunity, despite falling real estate prices.
Why? Because prices are so very low right now, that you can buy properties at pennies on the dollar and still make money selling them at nickels on the dollar.

Thoughts

more info

Real Estate Wholesaleing Increasingly Attractive In Today’s Real Estate Market

We are often asked, “What is the fastest possible way to make money with real estate investing?”

Our answer is always the same, and it’s a strategy we use all the time in our own real estate investing, even though we’ve been investing in real estate for years.

The hands-down, no argument, absolute fastest way to make money in real estate is through buying a property low, at a great price, and then flipping it off to another real estate investor who can still sell it at a profit.

Some real estate gurus refer to this as wholesaling because you are going into the property up front with the idea that you may not sell it to an end buyer.

That is, many wholesale properties are acquired by one real estate investor and sold to another real estate investor who plans to resell the property to someone who plans to live in the property and use it as their home.

Wholesaling real estate is not a lot different from wholesaling anything else.

The trick is to buy at the right price, which means you really need to know the value of properties before you start your wholesale buying program.

The second trick is to build a strong list of real estate investor buyers so that you can turn your wholesale deals quickly.

This is necessary to make the most money possible, because you typically make a lot less flipping wholesale properties than you do selling to retail buyers.

Just remember, buy low and turn deals fast, and you can succed as a wholesale real estate investor!

Thoughts

about the author

Real Estate Private Money Programs Offer Numerous Advantages

One strategy that real estate investors can use and really benefit from in their real estate investing, is to build up a warchest of private money lenders who they can go to whenever they need capital to buy a great deal.

We act as private money lenders to people whom we work with, and we also use private money lenders to help fund our deals when something wonderful comes along that we want to invest in.

Starting a private money lending program is not nearly as hard as you may think.

Investors of all sorts in all sorts of investments are always on the lookout for investments that pay high returns with low risk.Real estate investing fits the bill for these investors, because real estate offers a high return.

In fact, the return is high enough that there is an opportunity for a real estate investor to buy a property with expensive money and still make a return, despite paying a high interest rate to a private money lender.

Thoughts

blog archives