Archive for January, 2011
Why Buy Property When You Can Buy Mortgages?
Everyone thinks that buying mortgages is some complicated process reserved for the professional property investors that have been in the business for some 30 odd years. However the process of buying a mortgage note is easy and a great way to make profits. You have the chance to get a great return on your investment without involving yourself in a lot of maintenance and effort with the bank.
The great thing with owning mortgage notes is that you have all of the security of the real estate because if the homeowner doesnt pay you you can still foreclose and take the house back. So youll just end up back in the real estate game with that particular piece of property but at least you got some payments on the property over the years. On the other hand as long as the homeowner pays you as agreed you dont lift a finger you just take the money to the bank.
This is because when you own the mortgage note you essentially become the bank. Do you think the bank cares whether the homeowner keeps up the property theyve mortgaged? No all they worry about is getting their monthly payments.
As a mortgage note investor you dont have to deal with The Three Ts.
Tenants
Termites
Trash
When you become the bank youll have a lot more free time. Its much easier to be the bank than to be the property manager or the property owner trying to sell.
It Takes Forever to Get My Profits!
True you are waiting for monthly payments on the property and this may be the clincher for some property investors. Rather than a lump sum profit you must wait for your profits over the term of the mortgage which can be decades.
However if youve got the money to invest in several mortgage notes youll be able to live well and still make those profits on the monthly income you receive.
Most people worry about getting a mortgage. They never bother with the process of creating a mortgage or whats in it for the banks. When you buy your first mortgage note youll become the bank and see why its good to be a mortgage note investor.
About the writer: Isnt it time you learned how to capitalize on one of the best markets for real estate investing? With the recent flood of foreclosures now is the time to learn to invest correctly in real estate from the hosts of the nations leading show on real estate investing Judson and Lynn Voss. Visit http://www.yourrealestatefortunes.com and learn for free the nohype truth about choosing the right real estate investing strategy to start making you money today.
Why Buying In A Down Market Is The Way To Go
If theres any doubt in your mind that Chicken Little is alive and well all you need to do is pick up a newspaper or turn on a newscast. Reporters nationwide are reporting the collapse of real estate prices and most are promoting the idea that real estate is the worst possible investment on the planet right now. Novice real estate investors take note: Reporters are usually behind the curve and if you get your investment advice from reporters youll get stuck behind the eight ball. Heres the truth about todays real estate market and why now is the best time to buy.
A fundamental fact about real estate investing is that youre in it to make money. Ideally you want to make money at three stages of a transaction:
When you buy
When you hold
When you sell
In order to make money you need to buy real estate as inexpensively as you can. The law of supply and demand says that when supply is up demand falls and so do prices. Thats where were at right now. You couldnt lose money unless you were trying for quite awhile because prices were on a nonstop trip to the stratosphere. However a perfect storm was brewing and when the real estate bubble popped it was felt all over the world. Investors and speculators who waited too long to get out of real estate were bombarded by the pieces as prices tumbled back down to Earth.
By investing as heavily as you can in residential real estate when prices are at or near the bottom you stand to turn a massive profit when it heads back up again. The reason is because youll have a jump start on people who wait too long to get into the game. While theyre plotting and planning whether prices are going up theyre losing profits. Its nearly impossible to get in at exactly the right time. The best you can hope for is to be close.
Low prices give you an opportunity to buy more property than you could if it was more expensive. Some real estate investors are afraid to pull the trigger on a purchase because theyre afraid it might lose value before it appreciates. If youre smart and you have a good cash flow analysis done before you decide to buy it wont matter if you lose money in the short term.
If you have positive cash flow your property will be paying for itself on a monthtomonth basis. What that means is that you have more coming in than you have going out. Thats a profit. So when your investment property turns around and begins appreciating again you can ride the wave of appreciation as it builds equity and you become wealthier while you continue to earn money each month off the income it produces.
Then when you sell you get the benefit of the price increase over what you paid for it. This is a true winwinwin situation for you as an investor. The key is having the wisdom to sell at the right time and remembering that real estate is cyclical. Making money is as simple as buying low and selling high.
Buying in a down market is the best possible time to buy. You get to be a three way winner if you follow good real estate investing sense by buying low enjoying positive cash flow and turning yet another profit when you sell.
Remember by the time the news media catches wind of a trend the trend is over. The news is for reporting what has already happened. They cant see into the future and theyre only marginally qualified to report the past.
So buy low invest well and secure your future today!
About the writer: Peter Vekselman has been involved in over 1000 successful real estate deals in his 10 year career in real estate. He now teaches hundreds of individuals throughout the US on how to put real estate deals together http://www.CoachingByPeter.com.
What To Look For When Choosing A Mortgage Lender
There are many things that you are going to have to look for when you are choosing a mortgage lender. It is going to be very important for you to find the right lender because the right lender will translate into the right loan for you. For many people it is going to be important for you to make sure that you have the right loan because it is vital that the loan is going to be something you can count on for the rest of your life. Therefore you need to be sure to have the right loan and along with that the right lender.
There are also several things that you are going to want to look for in a lender so be sure that you are focusing on the most important aspects of the lending process. Finding a good lender is never something that you should rush so you want to be sure that you can do all that you can to take your time. If you are trying to find a lender in a hurry chances are always good that you might end up messing up and picking the wrong type of lender. This will lead to you having problems with the loan that you end up getting so take your time no matter what!
Good History and Reputation
The first thing that you want to look for in a lender is history. It is going to be important for you to choose a lender that has been around a long time especially with tricky market conditions today. A newer lender might not be able to provide you with what you need and they might not have the experience that it takes to be sure you get the best loan for you. Therefore you might be stuck with a bad lender if you choose someone who has been around for only a few years. Try to choose a lender that has a long history because they’ll be better able to get you what you want when it comes to loans.
However there is something that is equally important as history and this is important today with all of the crises that affect lenders. Just as important as history is a good reputation. You need to make sure that your lender has a great reputation meaning that they are good at what they do and they have been good at it for some time. Stay away from lenders who have made poor financial decision in the past or lenders who look like they might be in a bank situation that is not going to last very long even if those lenders have been around a long time. Do some checking into the stability of the lender and make sure that you are choosing those that are very stable and that will be there for the long haul.
People Say Good Things
Next you are going to want to be sure that you are picking a lender about which people are saying good things. Do some listening to your friends and family members who have gone with a certain lender and make sure that you are hearing good things before you go with that particular lender. Stay away from any lender that you hear bad things about unless you know that the things you are hearing are faulty. It is a trick time to borrow money today so you want to be sure that your loan is not made any worse by lenders that might have problems.
Friendly and Accommodating
You also want to be sure that the lender you choose is friendly and accommodating to you. This is very important because you might have various situations that you need a lender to focus on and they should be willing to work with you. Be sure that they are friendly and that they make you feel good when you meet with them. Also be sure that they are willing to work with you and with any problems that you might have.
Have Lots to Offer
Lastly find a lender that has lots to offer to you. Focus on the different types of loans that they have available and on what you might consider getting from that lender. Because you never know how your credit will work out you want to go with a lender who looks like they will have lots of options especially for you if you aren’t going to be the typical borrower.
About the writer: Sandy Darson is a freelance writer who writes about topics and financial products pertaining to the mortgage industry such a fixed mortgage available from a mortgage lender.
