Finance Your Real Estate Investment Properties
Unlike traditional residential real estate mortgages, real estate investment financing is way more creative and offers more options than you think. The golden rule in real estate investment is OPM (Other People's Money).I have enough money; shouldn't I buy my real estate investment for cash? No, I absolutely advice against investing large sums of cash into a single real estate investment. There are two reasons why not. First, you give away most of your profits by not leveraging your real estate investment. Second, it is far too risky to put every egg into one basket.Let me explain the leverage issue for a moment.
I will give you an example of a $100,000 investment property that typically increases its value (appreciates) by 7% average a year. Maybe more, maybe less depending where you live. Paying all cash for this property will yield in a 7% appreciation profit plus the net profit from renting the place. Now you're looking at roughly 15% of returns.If you're conservative with your investments you might be satisfied with this kind of a return. These days you might get equal or better returns with other conservative investments minus the hassle of being a landlord.
But you don't mind being a landlord, because you understand and utilize the leveraging method with financing your real estate investment.With the example above you will make roughly $15,000 a year in profits from your investment. Now let's take a closer look at what leveraging can do for you. Today a typical real estate investor can get financing as high as 95% - 97% of the purchase price. Occasionally 100% financing is available as well. But this would be totally unfair in this example to compare this with all cash purchasing.15% return sounds like a lot, but wait till you see this.
Let's assume that the rental income will cover all your expenses including the mortgage payments. Taking the same example from before your net return would be the 7% appreciation profits of your property. This would translate into a $7,000 a year profit. With a 95% financing in place you would get $7,000 return on $5,000 (your 5% down payment) invested. This is a whopping 140% return on investment.With the same $100,000 you can go out there and get 20 investment properties, finance 95% of it and make an amazing $140,000 profit a year.
This beats the projected $15,000 profits with an all cash transaction any day.Of course you will have a lot of trouble to get financing for 20 properties in a single year. Typically 5-6 new rental property mortgages are the maximum lenders will allow these days. This is the signal to get creative with your financing structures.In this case sellers financing would be your key to achieve your goal of maximum leverage of your investment dollars. Despite the message from all these late night infomercials, seller financing is harder to get than they want you to make believe it is.It all depends on the seller's ability to offer seller financing and the seller's motivation. Only about 1 out of 20 properties for sale are able to get seller financing.
That means that there's no mortgage balance on the property. From this narrow selection the seller must be motivated to sell under these conditions. This could be tax reasons, time constraints, personal reasons and many more.As you can see this translates into a lot of work to achieve your goals. But let me tell you one thing. This separates the tire kicker real estate investors from the real go-getters.
Wouldn't you agree that a little bit of hard work and determination is well worth it to build a real estate empire?I think it is well worth the trouble and hard work. At the end of the day you keep building your real estate investment portfolio and sooner than later you will be able to cash in.Sincerely,Peter DoblerCopyright (c) 2005 Peter Dobler.
Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.Learn more about real estate investments at http://www.suncoastrenttoown.com or send a blank email to mailto:suncoastrenttoown@getresponse.comCommercial Mortgage Financing
Ever wondered what you could do with a commercial mortgage? Well, to be quite candid, there is a plethora of ways to make use of a commercial mortgage.
Such a mortgage can be used to finance many different types of properties, so let’s take a minute to review these properties.
Of course, not all commercial investments are created equal.
Some inherently involve more risk than others.
As a result, some banks and financial institutions that offer commercial mortgages may or may not offer a product that finances one of the following.
As always, it will be up to you to shop around and find a commercial loan broker that offers a commercial mortgage package that fits your needs.
Apartments
??" Great investment opportunities exist with apartments.
Apartments serve as a great form of securitization for a commercial mortgage. They also prove to be great...
Mortgages > Commercial Mortgage Financing
Mortgages - 10 Steps to reducing monthly mortgages
Owning a home means money management and good sense. The first step is to sit down and take a hard look at your finances. Then decide to purchase a home where the down payment and mortgage will be what you can afford. Stay well within your means. If possible consult a finance professional and consider putting down a greater down payment.
Cost factors will include: total cost of home; maximum monthly housing cost (approximately 32% of your gross monthly income); and monthly debt load (not more than 40% of your gross monthly income). Try and keep the debt ratio as low as possible.
A reduced monthly mortgage payment is a dream come true for just about everyone. There are many ways in which one can do this:
? Since interest rates keep changing you would need to keep a track of changes and opt for refinance at a lower rate when the time is right. This would reduce your outlay considerably. Do the calculations to determine your savings after...
Mortgages > Mortgages - 10 Steps to reducing monthly mortgages
California Mortgage Interest Rates
When one decides to avail a loan, it is important to assess the rate of interest payable. California mortgage interest rates and terms are different from other states due to the prevailing federal provisions that allow different states to fix varying interest rates. These are fixed based factors such as cost of living, lending rates etc. Mortgage interest rates are usually long term commitments ranging from 15-30 years and in some cases even more. Therefore, while choosing a mortgage package, it is vital for one to try and avail low interest rates.
An adjustment interval permits changes in either the interest rate or the monthly payment.
The interest rate on most adjustable-rate mortgages may change after one, three or five years. There are also provisions of additional adjustment intervals, which may be negotiated with banks in order to take advantage of various mortgage interest rates.
Adjustment dates are usually decided right at the beginning and...
Mortgages > California Mortgage Interest Rates
New Online Resource for Real Estate Agents, Mortgage Brokers and Consumers Matches Buyers With Sellers Willing To Assist With Financing Offers Free Listings Until 10/31
Dearborn, Michigan (ContentDesk) August 31, 2005 -- Until September 30th, 2005, SellerHeldSecond.com is allowing real estate agents and home owners the opportunity to list their homes for sale
for free on SellerHeldSecond.com. SellerHeldSecond.com is the world's only online real estate tool matching buyers who may not qualify for the home of their dreams through traditional financing with sellers willing to assist the buyer in financing part of the transaction.Known in the real estate and mortgage industry as seller held seconds (shs) or seller financed mortgages, in a seller held second transaction the buyer obtains a traditional mortgage from a bank or lending institution.
The difference between what the buyer obtains from a traditional lender and the purchase price of the home is then carried as a "second mortgage" by the seller of the property on which the seller receives monthly payments and interest. It is estimated that nearly 10% of the real estate transactions...
Mortgages > New Online Resource for Real Estate Agents, Mortgage Brokers and Consumers Matches Buyers With Sellers Willing To Assist With Financing Offers Free Listings Until 10/31
How Long Your Mortgage Runs Determines How Much You Pay
The first thing most of us think about when the time comes to take out a mortgage on a new home is the interest rate.That's both perfectly natural and very sensible.
The rate of interest we pay can make an immense difference ? a difference amounting to tens of thousands of dollars ? in what the actual cost of our house ultimately turns out to be.Still, interest rates are far from the only thing worth thinking about where mortgages are concerned.
Other important variables need to be considered too.
One is the question of whether to take a fixed interest rate of choose from among the many kinds of variable-rate mortgages that have been created over the years to meet the differing needs of different buyers.Another ? and a very important one ? is the rather basic question of how long you want your mortgage to run.
Even with fixed-rate mortgages, a broad spectrum of time spans is commonly available.
In most cases the extremes are 15 years on the...
How Long Your Mortgage Runs Determines How Much You Pay
Mortgages > How Long Your Mortgage Runs Determines How Much You Pay
Reverse Mortgage Providing Peace of Mind Without Sacrificing Safety or Security
For many seniors one of their greatest sources of security is their home. It not only provides a comfortable and familiar environment, but it provides a sense of independence and a source of many fond memories. The equity in that home represents a financial nest egg and a legacy for them to pass on to their family. With the ever-increasing cost of maintaining a home, along with the overall rise in the cost of healthcare, finding the resources to live out ones life at home is becoming a growing challenge. What is a Reverse Mortgage? A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a government insured loan program that allows senior homeowners, age 62 and older, to convert the equity in their home into usable cash.
Unlike a conventional mortgage however, qualification is not based on credit, employment, income, or assets, and there are no monthly payments. The homeowner never forfeits title, and as long as they pay the property taxes and homeowners...
Reverse Mortgage Providing Peace of Mind Without Sacrificing Safety or Security
Mortgages > Reverse Mortgage Providing Peace of Mind Without Sacrificing Safety or Security
Demand Dignity in Public Speaking Training (c)
Mandy*, a bright, attractive professional woman, had a fear of speaking in front of groups. Recognizing that her feelings of vulnerability and self-consciousness were limiting her potential, she showed up for a presentation skills class filled with trepidation. In the class, the students spent the morning listening to the instructor explain the rules of public speaking. That afternoon, they gave their presentations to the group. After nervously waiting through five other talks, Mandy took her...
Finance Your Real Estate Investment Properties puppy training Mortgages
Mortgages > Demand Dignity in Public Speaking Training (c)
Avail Home Improvement Loans, Be A Proud Homeowner In UK
Are you thinking about improving your home? But short-off cash? Don't be depressed. You can fulfill your wish with home improvement loans, a custom-made facility for the UK home owners.
As the name suggests, home improvement loans are served to the UK people mainly for improving their home. Purposes of using home improvement loans could be major or minor. Some common purposes are like:
? Expanding home by adding of new rooms
? Landscaping garden
...
Mortgages > Avail Home Improvement Loans, Be A Proud Homeowner In UK
VoIP Phone System
A Voice over Internet Protocol, or VoIP, transmission is initiated by converting voice into digital format. This can be done by Analog Telephone Adaptor (ATA) or by the computer itself using software. In the Public Switch Transmission Network (PSTN), the dialing of the number initiates the call by connecting the call to the public switch and routing the call to the correct party's telephone number through the telephone network.
A VoIP network also has similar functions like that of...
Mortgages > VoIP Phone System
Rare 10.71 Acre Parcel for Sale in Squaw Valley, California by Lawrence Realty
Squaw Valley, CA (ContentDesk) March 10, 2006 -- Squaw View Acres, a rare Tahoe mountain estate parcel, boasts panoramic views of the Squaw Valley Ski Area. Squaw View Acres is a little piece of paradise perched just above the valley floor at the west end of Squaw Valley. Spectacular views, beautiful granite outcroppings, mature trees, and southern exposure are just a few of its attributes. This rare, approximately 10.71 acre lot, is one of the last large parcels with residential zoning close...
Finance Your Real Estate Investment Properties lake tahoe Rare 10.71 Acre Parcel for Sale in Squaw Valley, California by Lawrence Realty
Mortgages > Rare 10.71 Acre Parcel for Sale in Squaw Valley, California by Lawrence Realty
Sweet 16th Birthday Party Ideas
Sweet 16th Birthday Party IdeasIs there any party more delightful than sweet 16? If you're stuck for 16th birthday party ideas, then you need to sit back and start counting! It's easy enough if you remember that a sweet 16 party is all about that magic number. How many sweet sixteen balloons do you buy? Sixteen, of course!Turning 16 can be the perfect time for an all-girls party or for a co-ed gathering. No matter what you choose to do, talk with your sweet 16 birthday girl first for her ideas....
Finance Your Real Estate Investment Properties
Mortgages > Sweet 16th Birthday Party Ideas