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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