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Guide to real estate investingIntroductionthese tenants are willing to pay more than the average renter willpay. Create a hedge against inflation – Even in times ofinflation, opportunities abound with real estate. That’s becauseinflation tends to force higher real estate prices and because theunderlying asset (your property) can be counted on to be therethrough inflation (while some other investments may not surviveeconomic downturns). Make money with low risk and low startupcosts – The market for potential customers is huge and youcan start your business in real estate investing with little or evenno capital of your own. There are always private investors in themarketplace who have the money to invest but do not know how(or don’t care to do the work) to do the deals themselves. Profit from equity buildup – You build equity at thesame time as the property is naturally increasing in value due tomarket conditions and demand. And you can tap that equity in aproperty to finance additional investments. Enjoy multiple channels for profit – There are manyways to invest in real estate and there is something for everyone,from the casual or first-time investor to the more experienced orfull-time investor. Once you understand the variety of opportunitiesavailable, you can choose the deals that help you reach yourindividual goals faster.3

Benefitfromrealestate’srepeatability – Once you learn themany easy ways to find the opportunitiesthat will help you succeed.basics, learning advanced skills is eveneasier than you might realize. You can Market your business easilyuse the knowledge you build about realMarketing real estate is not complicated.estate investing to repeat the processEverything from a For Sale sign in the frontover and over again, on multiple typesyard of a home you have renovated toof properties, increasing your profitsan ad or direct mail campaign can bringconsiderably without working harder toin customers. Some investors have netteddo so.thousands of dollars in profit on dealssimply because someone called them Benefit from tax breaks – Whenfrom a car magnet ad on the side of theiryou invest in real estate, consult with avehicle or from a flyer they posted on atax professional about the opportunitiescommunity bulletin board at an apartmentthat may be available to you throughcomplex.depreciation, in writing off certain businessexpenses, and through tax breaks (for Build a power team to helpexample, deducting the interest portion ofyou increase and expedite yourmortgage payments).profits – To succeed with real estateinvesting, you will want to establish solidpropertiesrelationships throughout your communityand opportunities easily – Withand in the business relationships withreal estate investing, opportunities arepeople who can help you build yourall around you. You can make a simplebusiness, partner with you in investments,effort, like driving through neighborhoodsor be available to buy your properties.looking for For Sale By Owner signs, orA winning team of contacts wouldyou can do everything from establishinginclude people like a good real estaterelationships with real estate professionalslawyer, real estate agents or brokers, anto placing your own ads to generate leads.accountant or tax expert, a mortgageWhat’s nice to know is that regardless ofbroker, a professional home inspector,the time you have available, there arementors or coaches who can guide Find4investment

Guide to real estate investingIntroductionyou through transactions and help motivate you, and qualifiedcontractors, builders, and other professionals who can assist youin rehabbing your properties. Help others – One great aspect of real estate investingis you can help others in need. Consider someone who has adistressed property because they live in another state and they’retrying to manage it long distance. You could help alleviate thatburden. Or consider someone who is struggling with debt andnow the bank is going to foreclose on their home. You couldhelp them save their credit. The possibilities for helping others areendless.A MARKET FULL OF OPPORTUNITIESThere are not only many benefits associated with real estate, butalso many opportunities for success regardless of your financialgoals, location, or financial situation.Short-term and long-term strategiesWith real estate, there are both short-term and long-term investmentstrategies available to you, giving you the flexibility to makeinvestment choices that fit your schedule and needs.As an example, you may wish to hold properties only for theshort-term, so you might purchase a property below fair marketvalue, fix it up with minor repairs and cosmetic improvements (suchas painting and landscaping), and then turn around and sell itquickly for profit.5

You can even purchase or contract for aOpportunities in all areasdistressed property at well below fair marketvalue, and sell either the property or the rightYou can make money with real estateto buy the property, immediately to anotherregardless of the area you live or invest in.investor who will do all the work improvingThis book will begin helping you to becomethe property. This short-term strategy is knownknowledgeable about how to analyze andas “quick-turning” or wholesaling properties.identify profit potential in real estate markets.Individuals have made fast profits of thousandsYour future training will take you to the nextof dollars on just one deal in wholesalinglevel and to those who are committed, thea property and you can too! Additionally,potential for wealth accumulation will beinvestors have used wholesaling strategies tounlimited.make quick cash to pay down their debts,Just a few examples of ways to buildgenerate extra income in addition to a full-wealth follow and illustrate this point. Fortime job, start their own business slowly andexample, in low-income areas, you can findwith limited risk, and create capital for futureseveral great opportunities for rehabbing orinvestments.wholesaling properties. These opportunitiesA long-term strategy might be to buyallowa home below fair market value and thenaffordable, clean housing for low-incomerent it out for any number of years or leasefamilies, while generating positive cash flowit to someone else giving them an option tothrough highly profitable weekly or monthlypurchase it in the future. In situations like these,rentals. When you act as the intermediarywhen you have tenants, they are buildinginvestor, they provide a way to generateyour equity because with every payment theyincome through either quick turns aftermake to you, you are taking that paymentthe rehab or fast cash through wholesaleand decreasing your existing mortgage.techniques.theowner/landlordtoprovideIn moderate-income areas, you canprofit from excellent resale values and workwith a large market of first-time homebuyerswho may need special financing optionsto purchase their home. Moderate-incomeareas can also provide good rental incomeopportunities.6

Guide to real estate investingIntroductionIn just above median home value areas there are currentlygreat prospects for two techniques: either offering lease optionsto potential homebuyers, or buying at substantial discounts due todistressed seller situations and then holding the properties for shortterm for profits at the time of sale.And finally, there is tremendous opportunity in some of the bestneighborhoods and school districts in the cities across the U. S. dueto the distress of the sellers who must get out of a property quickly.While not for the beginning investor, these types of deals can giveexperienced investors the opportunity to invest when tax shelters arethe priority.Evaluating Buy & Hold PropertiesIf you intend to buy and hold property for cash flow, it is importantthat you choose properties that will cash flow—and the United Stateshas an abundance of properties available that will meet your needs!Having said that, if you are considering rental housing considercarefully the benefits of buying houses that have more than onestream of income coming in each month. For example, if you arebuying a single family house to rent out, if it is vacant for a month,you are making the entire mortgage payment. However, if insteadof buying single family houses to rent out you focus on duplexes,triplexes, and quads, if one of the units is empty, you still have theother(s) to help cover your expenses. That is part of the beauty ofreal estate—various tweaks on your buying decisions can makebig differences in the outcome of the deal. And in this scenario, theprice of a duplex is seldom anywhere close to double the price ofthe single family. Yet, the rents from each unit are not half as much asthe single family’s rental income price. For that reason, it is unusualfor us to recommend you buy and rent out single family homes inworking class neighborhoods. Go for the duplex! On the other7

hand, in the upper income neighborhoods, Seller financing – You can takelease options work beautifully on singleadvantage of seller financing, leasefamily homes because you will be dealingoptions, etc., to allow you to purchasewith future buyers of the property from theproperties with little or no money down.beginning. Knowing what to buy, where tobuy, and how to hold will move you to your Sourcesfinancial dreams more quickly than you can(capital)imagine—the opportunities are endless!investment – Even people with poorMultiple financing optionsReal estate investing can be done virtuallyanywhere by anyone—the key is knowledge.It provides a way for any individual toget involved and reach their financialgoals, regardless of their current financialsituation. That’s because there are manycreative financing and buying approachesavailable. You just have to know where andhow to look for them. For example, you canfind opportunities through: Government programs – Thereare many ways to purchase homeswell below fair market value throughgovernment-sponsored programs, andthere are ways to use governmentprograms to find opportunities you couldnot find anywhere else.8fortoseedfinancemoneyyourcredit have still been able to achievesuccess in real estate investing; you justhave to know how to look for the creativefinancing opportunities. Some examplesinclude seller financing, wraparoundmortgages, equity financing, partneringwith other investors, etc.So, for many reasons, real estate providespeople with opportunities to profit andearn income in ways they never wouldhave dreamed possible. The more youlearn and the more prepared you areto take on new opportunities, the betteryou’ll succeed in generating amazingprofits and changing your life forever. Weare dedicated to helping you get there.So let’s get started!

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EARNED3-4 StreamsPORTFOLIO2-3 StreamsPASSIVE3-4 Streams

Guide to real estate investingThe Circle Of Wealththe circle ofwealth MultipleStreams Of Income InReal Estate Investingcreating your personalbusiness road mapiThe same is true for choosingto invest in business. Having a clearidea of the benefits and advantagesof different types of real estate deals,f you were going to travel fromclearly evaluating where you are inNew York City to San Francisco,terms of resources, and moving in thethere are such good road signs andright direction with the least amounthighways systems across the Unitedof wasted time will be a tremendousStates that you could probably findasset to you. That is the purpose ofyour way without having a detailedthis chapter—to help you begin toroad map that outlined your journey.get more clear about where you are,But doing so wouldn’t make muchwhere you want to go, and the bestsense, would it? You would end upway to get there.taking a few wrong turns, you’d haveOne of the first things you shouldtrouble getting started, and ultimately,do is a personal financial evaluationyou would be sure to get lost a fewof where you are at this moment intimes along the way.time. Do you have strong or weak11

credit? Do you have access to moneylending sources? Are they public (lenders,banks,mortgagebrokers)orprivate(personal contacts who might be willing tohelp you to get started)? Once you haveclearly delineated your current position youare better able to begin choosing the rightTechnique/circumstanceBenefitWholesale buying& contract salesQuick cashreturn/low cashinvestmentLease OptionCash flow,appreciation/can be structuredwith a low cashinvestmentForeclosureQuick cash(short-term), needssome cash to dotypes of deals to move you towards financialfreedom. For example, if you have fewfinancial or credit resources, you will wantto choose types of real estate deals (at leastin the early stages of your career) that donot rely on either credit or funding. One ofthese types of deals is called “wholesaling.”So, let’s begin this chapter by outlining theRehabbingvarious ways to make money—and the typeof money it takes to do that kind of deal.MANY PROPERTY TYPES ANDINVESTMENT STRATEGIESMobile HomesCash flow/lowcash investmentReal estate investing is attractive becauseTax Liens & DeedsPortfolio incomefrom interest/higher naging otherinvestors’ property)Cash flow/very low cashinvestmentneeded to beginthere are many property types to invest in,as well as many strategies for what to dowith those properties. And each comes withits own rewards. The following are some ofthe main types of investment opportunities,with their primary benefits listed.12Quick cash,cash flow/needscash or creditinvestment

Guide to real estate investingThe Circle Of WealthInvestors consider different options based on the outcome theywant to achieve, the amount of cash they want to invest in theproject, and/or their level of experience with different strategies.For example, an investor may want to consider quick cashinvestment strategies for a variety of reasons, among them beinghigh consumer debt (generating quick cash to pay down that debt)or lack of seed capital to w

of real estate’s best opportunities, let’s take a brief look at the real estate investment market in general to see why it provides so many avenues for building wealth. The MaJoR BenefiTs of Real esTaTe The benefits of investing in real estate