(p31 -
The Lazy
Investor's Guide to Real Estate)
Real Estate Investing Financing Truths - Part 2 of 2
No Money Down and other 'Creative' Real Estate Investment Methods
For many years, investors have seen the traditional real estate
investment methods described in Part 1 of this article as a lot
less than desirable!
They began looking at the prices of houses and finding methods
of bringing the price more in line with making more money in a
faster way.
These savvy investors developed ways to get loans on properties
that allowed them to pull money out whenever they buy a real
estate investment (cash back at closing) and lower their
payments to build up their cash flow ('creative' investing).
They even developed methods of determining a Sellers motivation
for selling - and bought the property at a discount price.
These creative investors also saw that some Sellers were not
able (for whatever reason) to sell the property at a discount
price, however, they still needed to get rid of the property, as
they didn't know how to manage it as a landlord, or make money
from it - not that it couldn't be done, they simply lacked the
knowledge of how to do it.
The Seller just never learned how to profit from a real estate
investment.
These investors understood how to make money from such
properties, and did.
They bought the property on discount terms, and made money from
the spread by selling it at retail price and/or terms (certainly
one of my favorite methods of real estate investing).
Buy Every Real Estate Investment via Discount Price or Discount
Terms.
Several years ago (actually, it really took off in the 1980s),
Real Estate Investment Experts began seeing the potential for
making money in bringing this treasured knowledge to the public
in the form of home-study courses, seminars and Boot Camps.
They found that it wouldn't create competition for themselves,
as many people, even though they purchase real estate courses
and attend seminars and Boot Camps, will not actually take the
information and utilize it to make the hundreds and even
thousands of dollars possible for anyone serious about Real
Estate Investing.
These Real Estate Investment Experts (being dubbed 'guru') found
that this side of the business was lucrative often making more
income from teaching about real estate investing than the actual
real estate investments themselves.
It is important to understand that these real estate investment
gurus learned early that they can only teach others what to do,
not be responsible for the other persons success.
Providing the information to those that choose not to use it is
very similar to the old adage "You can lead a horse to water,
but you can't make it drink."
Yes, these real estate investment gurus got wealthy from selling
this information, but their theories, principles and techniques
taught thousands of others (those that take action on what they
learn) how to realize their dreams utilizing their tried and
true methods of real estate investing.
>From home-study courses and seminars, to boot camps and
one-on-one training, these methods have been proven to be not
only interesting to millions of people, but capable of bringing
massive wealth to those that take action on what is taught -
those that go on and actually make real estate investments
themselves.
Knowledge changes things...
This knowledge of no money down real estate investing techniques
being known by thousands of Sellers has made changes in the
industry.
By bringing the Seller into the knowledgeable realm of Real
Estate investing, Sellers now know many of the methods that the
gurus teach.
This is both a blessing and a curse.
To the talented investor, these knowledgeable people are more
likely to work to create a WIN-WIN situation.
Investors that avoid the tricks and stick to the basic real
estate investment techniques and terms that have been proven to
work over and over again, have proven these powerful real estate
investment strategies work even with these informed Sellers.
Oh, yes, many of these real estate investment techniques work
today, as they have for many years. So much so that it is almost
possible to say they have become principles; things that work,
over and over, the same way no matter what happens - like
gravity.
However, sadly, they are not really principles, as several of
the real estate investment methods and techniques that worked in
the 1980s and even through the 1990s are today not as powerful,
nor do they work as often as they did before (although some
'gurus' are still teaching the same methods - even after 20
years...).
Some of this decline is due to a more educated society (due to
the flood of real estate investment information available via
books, tapes, home-study courses and the Internet), while some
of it is due to simple changes in policies and laws.
It seems like a wave started late in 2003, the FHA announced
that flips (transactions where investors buy houses cheaply and
sell them at or near market rates) are "illegal." (Note that
illegal in this context is not a legal term, but one that has
been adopted from "you are not allowed to do that and do
business with us.")
The FHAs announcement started a wave of concern (if not panic)
throughout the Real Estate investing community.
Title and Mortgage companies began to tighten up their reigns.
Many of these companies, in lieu of direct information, began
simply not completing any transactions that did not follow the
traditional real estate investment system. This made it hard for
investors to complete transactions that involved simple
buy-then-resell agreements (as they are not really real estate
investments, but a rather nice way to make some fast CA$H!).
In rapid appreciation areas (California and Nevada, for
example), the ability to flip a property all but stopped (became
'illegal'). All the 'traditional' creative real estate investing
methods were virtually put on hold.
Ingenuity to the rescue, other methods of real estate investing
always seem to pop up. After all, "Necessity is the Mother of
Invention," and "Where there is a Will, there is a Way" are
absolute principles.
Investors have to make a way to get things done - a way to keep
their real estate investments profitable, and even more creative
real estate investing methods were developed - to keep real
estate investors, and the love of real estate investment, alive
forever.
Steve Majors - The Lazy Investor Profit from Real Estate
Investment articles, real estate investing information and news
from one of the most creative investors on the planet ~FREE
MEMBERSHIP & real estate training course~
http://SteveMajors.com
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