We've seen all the claims that have been made by many late night
real estate informational gurus. They all talk off making
thousands of dollars when you buy a property. But is it really
possible? Is it really possible to buy a house and pay no money
down and walk away with cash at the closing table?
It's because of these late night infomercials that no money down
real estate to pull cash out at closing has become one of the
most sought after topics on the net and late night television.
Most everyone has seen these commercials or even bought these
real estate investing courses. Most of these courses get filled
with dust, then to only find their way to the yard sale. Now,
you may be asking, " is it really possible and if so, how's it
done?"
Honestly, the one technique that gets talked about the most is
the least creative way to do a deal and the most risky. There
are many more profitable ways to real estate investing without
the personal risk and the liability. See, what happens is you
find an undervalued property, then you go to the bank to acquire
financing. Many lenders will loan 80% of the appraised value on
real estate investments. Many investors will then borrow the 80%
even if they only paid 65% of the fair market value of the
property. The crucial factor that investors must realize is that
this is borrowed money and you can't live off of borrowed money.
Also, you are personally guaranteeing that you will pay back the
loan. Therefore, if something goes wrong, then you are on the
hook with the bank.
Not only is this very possible to pull cash out when you buy,
this one method to real estate investing could be the single
worst mistake that investors make when buying properties. It's a
financial disaster waiting to happen. See, when you buy to pull
cash out at the closing table, you are pulling the equity out of
the deal. The equity is the value of the property beyond what is
owed against the property. When an investor buys a property
using this method, they are truly risking their financial
stability because they trust that properties will always go up
in value. This myth couldn't be farther from the truth. Most
don't even care to think about "what if the fair market value
goes down? Or what if the tenants that I have completely
destroys the home?"
So, are there other ways to create profitable real estate deals?
The answer is a very loud "YES." There are numerous ways to
hedge your risk of these scenarios while you avoid personal
liability and financial risk all together. You should seek out a
mentor or a trainer that will show you the ins and outs to real
estate investing without costing you a fortune. Also, when you
decide to use a mentor or buy a course of any kind, you should
look at what the guru's previous students have to say before you
decide to give up your hard earned money. We've outlined the
most popular real estate gurus and allow real life consumers to
give reviews on many of the top real estate investing programs
selling today. To read these reviews, then go to
www.101Gurus.com.
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