Believe The Dream: What Is All The Hype Surrounding Real Estate Investing Really About?

Real Estate Investing

The best reason for investing in real estate is that it actually works! Real estate investing proves that the American dream is still very much alive. What other avenue can an individual begin in virtually any circumstance in life and build an empire of wealth in a relatively short period of time? Real estate investing does not discriminate against education levels, class, age, or region. You do not need a college degree to understand the fundamentals of real estate investing. You do not need to have a high-paying job or already be wealthy to get started. It can create enormous amounts of wealth for any person who is simply willing to follow the system. There is no need to re-invent the wheel; systems are in place that have been proven for investors in any circumstance or economic condition. You?ve heard similar claims so many times now that they almost sound clich?. Well, even the most skeptical critic will soon see the power of real estate investing as the avenue you?ve been looking for to change your life ? that is, if you choose to get started.

All you need to start investing in real estate is determination, self discipline, creative thinking, willingness to work hard, confidence and a dream. The dream is the most important element. The dream?s power will make the other qualities come naturally. Have you ever struggled to follow through with a project you?ve started? It may not be because you?re lazy or lack self discipline, but because you never had the appropriate motivation. Perhaps the goal wasn?t that interesting to you to begin with, or perhaps you never really believed you could attain it. It is important for you to realize what is attainable so that your dream is not limited. Realizing that you can live a life of abundance makes it possible for you to have the ultimate dream.

I?m not talking about the dream of a nice house, fancy clothes and a sports car in the driveway. The dream I?m referring to is much larger?all-encompassing. It is the dream of freedom. You may think, ?This is the United States. I am free.? Let me ask you, do you own your time? Can you wake up in the morning and spontaneously decide that it is a good day to take the family out on the boat? Can you leave for that month vacation in Hawaii you?ve always wanted to take? Can you sit at home and read a book from cover to cover? Can you take the piano lessons that you always wanted but never had the time or money to take? Can you go back to school for the college degree that you never completed? Can you stay home and raise your children? If you are like most people in this country, you cannot. If you are like most people in this country, you do not own much sunlight in your life. You wake up just before the sun rises, go to work, return home just as it sets and retreat to bed. Then you wake up and repeat the process again and again until, if you?re lucky, you?re 65 years old and you retire?too tired and too old to do all those things that you put on hold until you had ?some time.? You are not free until you own your time. Time is the most valuable amenity that wealth can buy. That dream, the ability to own your time, is really the essence of the American dream. Ironically, it is a dream that few people attain, yet it is readily accessible to all. Using real estate as the vehicle, you can become wealthy, buy your time, and know how it feels to live your dream and be free.

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Mark Pratt is a member of a real estate investing company called http://www.myreiteam.com. He specializes in all types of real estate investing, including foreclosures, short sales, and multiple units. His website provides real estate investing software that allows you to track, analyze, and evaluate your properties.

The Changing World of Real Estate Investing

THE REAL ESTATE FAD IS OVER! If you?ve been dreaming of ?Flipping? real estate because you?ve heard of people making a fortune flipping houses - YOU ARE TOO LATE! The real estate fad has come and gone!

Like all fads, the ?Flipping Real Estate Fad? lasted only a short period of time. This is not the first get rich quick fad to occur and it certainly won?t be the last. Whether it?s flipping real estate, day trading stocks, breeding ostrich eggs, or trading tulips, our history is replete with examples of get rich quick fads that took the world by storm and ended badly for nearly everyone.

One of the first recorded examples of a get rich quick fad was the Tulip Craze that occurred in the Netherlands in the 1600?s. Tulips had just recently been imported from Turkey into the Netherlands. Many of the richest Dutch citizens started collecting the flowers and proudly displayed them in their homes. As time went by, the middle class took notice that this flower was so prized by the rich, and also started collecting the flowers. Before long, everyone wanted tulips and tulip bulbs and the prices started going up. As the prices rose, people started trading tulip bulbs as if they were a commodity or a stock. Someone would hear of a neighbor that had traded a tulip bulb and made a big profit. The neighbor also wanted to cash in on this new venture. Before long, it seemed like everyone was trading tulip bulbs. It got so ridiculous, that entire estates and life-savings were traded for a single tulip bulb!

At some point, prices became so ridiculously high that a few smart investors realized that the tulip fad couldn?t continue forever. These ?smart money? investors sold their entire stock of tulip bulbs and locked in their massive profits. Others followed suit and soon it became apparent that the market for the bulbs had disappeared. Suddenly, everyone wanted to sell their tulip bulbs and there were no buyers. In no time, panic selling caused prices to drop so far and so many people lost money that the country?s economy was propelled into a depression. So ended one of the world?s first recorded Get Rich Quick Fads.

Get Rich Quick Fads have continued to occur from the time of the great tulip craze to the present. The technology bubble of the late 1990?s was a prime example of one of these fads. The price of internet and technology stocks soared. Many of these inflated stocks were of companies that had no way to make money. Many thought that the price of technology stocks would continue to go up forever, because ?this time things are different?. RIDICULOUS! The value of a company who can?t make money is ZERO! People were blinded by greed and simply didn?t realize this reality until the crash occurred.

The economy of the United States took a double hit in the first two years of the new millennium. First, the tech bubble burst taking the entire stock market down with it. Then, a small group of terrorists brought our country?s economy to its knees with the attack on the twin towers of the world trade center. In response, the Fed lowered interest rates to a 40 year low. This lowering of interest rates along with the introduction of relaxed lending practices kept our country?s economy strong and opened up the possibility of home ownership (and real estate investment) to more Americans than ever before.

The increased demand for real estate also increased the demand for all real estate services. Homebuilders, realtors, rehabbers, appraisers, lenders, and everyone else in any real estate related business prospered. The demand for houses exceeded the supply and many smart investors began to speculate on houses. This was the birth of the house flipping craze! As the smart money began to make money ?flipping?, the middle class took notice and also started flipping. Before long, it seemed like everyone was flipping property for a nice profit. Demand for houses increased and it seemed like there was no limit to house prices. New investors entering the flipping business drove up the demand for houses, which increased the prices. The more prices went up, the more new investors entered the market and bid up prices even higher. It became a vicious cycle. It got so ridiculous that new ?investors? would camp out in hot markets just for the chance to bid on pre-construction projects.

This vicious cycle continued through late 2005, at which time the real estate bubble started to deflate. The smart money realized that prices had gotten ridiculously high and that the end was near. These ?smart money? investors started selling their real estate portfolios

The real estate fad is over. Demand has dried up and the number of houses on the market is increasing. In many areas, prices have already started down and this trend will surely increase as time goes by. The home buyers and ?investors? who used interest-only loans, negative amortization loans, and adjustable rate loans over the past few years will soon have payments that are drastically higher, when their promotional rates expire. Millions of these people will not be able to afford the higher payments and will lose their homes to foreclosure. All of these millions of additional houses on the market will further depress prices and prices will likely stay low for many years to come. The flipping fad is ending as suddenly as it began. With the lack of retail buyers, there simply isn?t a demand for flipped houses. Millions of the new ?investors? that started flipping during the recent fad will go out of business, losing a lot of money.

Why have I gone to the trouble to write such a gloomy report? Is this story over? NO! The TRUTH is that there always has been and always will be big money to be made in real estate. However, the money to be made isn?t in flipping or in the latest fad!

For me and others like me, the real estate bust will be very profitable. You see, I am not a ?Flipper? and I was not caught up in the recent real estate fad. I am in the rental property BUSINESS and I offer a product that people ALWAYS NEED?..a place to live!

There are MILLIONS of millionaires in the United States?…seven million millionaires to be exact. Many of those millionaires made their money owning rental properties. Rental properties are needed in all markets because people need a place to live. In fact, as the real estate market gets worse, more people will become renters.

Just today, I received a call from a woman who was looking for a house to rent. The reason that they needed a place to rent is that their house had been foreclosed upon. She explained that their mortgage payment started out at $600 per month with one of those gimmick introductory rate loans. Recently, their loan payment had gone up to nearly $1,100 per month and they simply could not afford it. They got behind on payments and the bank is foreclosing on them. Now, they will become my renters.

Why are rentals such a great way to make money, grow rich, build wealth, and retire early? The answer lies in the 5 different ways that we can make money with rentals, often without using any of our own money. The 5 ways to make money with rentals are:

1. Equity at closing!

Rental Properties MUST be purchased at a discount. It is almost impossible to buy a rental property at retail price and then rent it for a profit. The difference between what we pay for the property and the market value of the property is our equity, and can amount to tens of thousands of dollars for each rental property!

2. Cash flow

With rentals, we receive rent from our tenants each month and then pay our operating expenses and the mortgage. The amount of money left over is our cash flow. This is money you can spend for living expenses, to buy a car, for your mortgage payment, or anything else that you like. Cash flow is the lifeblood of every business.

3. Pay Down of Principal

One of the exciting things about rentals is that the tenant pays the mortgage payment and all expenses for us. Over the term of the loan, the mortgage will be paid off and we?ll own the house free and clear!

4. Appreciation

Historically, houses appreciate at 3% to 5% per year. Think of this as the icing on the cake.

Let?s consider a $50,000 rental property. Even if it only appreciates 3% per year, that is another $1,500 in equity that we pick up each year! You?ll note that we didn?t have to do anything to get this equity. All we had to do was continue to own the property!

5. Tax Depreciation

As if the previous four ways of making money weren?t enough, the government has seen fit to allow us to depreciate our rental property. This can be a significant savings on our taxes and is the same as making additional money on your property. As of the writing of this book, properties are depreciated over a 27 1/2 year period. This yearly depreciation can be thousands of dollars per year on a single rental property.

ARE YOU GETTING EXCITED YET?

By reading this article, you have already taken the first step toward improving your financial situation. Where do you want to be at the end of this year? Are you satisfied with your current financial situation? Are you happy working for someone else? Are you in a good position for retirement? Do you dream of the freedom of working for yourself? Would you like to make a significant contribution to your church or favorite charity?

If you do nothing to improve your situation, you will probably end this year in the same position that you ended last year. IF THIS YEAR IS TO BE THE YEAR THAT YOU CHANGE YOUR LIFE, YOU MUST DO SOMETHING DIFFERENT! If you have decided that operating a rental property business might be YOUR PATH TO FREEDOM, then you need to get started. Start with learning all you can about the rental property business and develop a plan to get you from your current position to your desired goal.

Make Money In Real Estate Investing By Using Other People’s Money

What is the first rule of real estate investing. Most real estate experts tell you “Leverage - Using Other People’s Money?.

Most real estate investors want 100% financing for a hand full of houses they intend to purchase or they request that the owner finance the property. The strategy is to buy and hold a handful of rental properties for a few years until the equity in the property has increased.

Then they either refinance all the properties or sell all the properties of take all the equity out and then retire rich with millions of dollars in equity or a healthy cash flow to sustain the lifestyle.

Within a thirty year period of time real estate market will have at least five downturns. The value of property in some areas can hit the bottom just as you decide to retire. The real estate investor of today does not want to wait thirty years to cash in and live the life.

Real estate investors diversifying their investment activities. Some are doing quick turn around transactions in addition to the long term buy and hold. If you are an investor. The theory of quick turn around transactions is finding distressed property get it under contract and sell it to another investor for a quick $5,000 - $15,000.

Some investors are doing short sales and pocketing more cash. Being house rich and cash poor can put many investors in a crunch if some crisis happens. Not having the money to close a good deal prevents some investors from cashing in on lucrative transactions. The first thing new investors need to understand is that lack of money should never be an issue when you plan.

Combine the buy and hold method with the quick-turn-around investment strategy to put cash in your pocket within a matter of weeks rather than years. If you find a good deal with lots of equity sitting in the property be sure you can re-finance within a short period of time to get the equity out and into another high yield interest investment fund that you can access when you find the next good deal.

Use ARMs with low start rates that give you 3 - 5 year before they reach their max. Refinance all your property with low start ARM?s and put the excess money in an account that builds your equity twice as fast. This financing alternative allows your tenant to make the full house payment while you pocketing Your money. No negative cash flow.

Set up lines of credit for your business. You may never need them but in case you do the money is sitting there waiting for you to use it to create more wealth. With a line of credit versus a loan, you only have to pay for the money you actually use.

To implement the strategies, you need to align yourself with as many funding sources that you can find. This strategy will insure that you can continue to add to your real estate empire or to maintain the empire that you have already built.

So, when you are building your real estate empire consider buy and hold strategies in addition to a quick turn-around transaction approach to investing. Build your funding sources so that you are ready to make the offer and close the deal.

5 Tricks To Make It Big With Real Estate Investing.

Real estate investing is one of the most attractive ways of making good money (that is if you do it correct). Moreover, real estate investing is also a lot of fun. A lot of people practice real estate investing as their core profession and, in fact, make a lot of money that way.

Real estate investing is really an art and, like any art, it takes time to master the art of real estate investing. The key, of course, is to buy at a lower price and sell at higher price and make a profit even after paying all the costs involved in the two (buy/sell) transactions.

Generally, people are of the opinion that real estate investing makes sense only when the rates are on the rise. However, real estate investing for profits is possible just about any time (and as I just said, real estate investing is an art). Here is a list of tricks that can make real estate investing profitable for you:

1) Look for public auctions, divorce settlements and foreclosures (bank/FHA/VA): Since quick settlement is the preference here (and not price), you might get a property at a price that is much lower than the prevailing market rate. You can then make arrangements to sell it at the market rate over a short period of time. However, make sure that the property is worth the price you are paying.

2) Looking for old listings: The old listings that are still unsold may provide you with good real estate investing opportunities. Just get hold of an old newspaper and call up the sellers. They might have given up hope of selling that property at all and with a bit of negotiation you can get the property for a real low price.

3) The hidden treasure: A really old (and dirty) looking house may scare off buyers. But this might be your chance for real estate investing that can yield good profits. So, explore such properties and check if spending a bit on them can make them shine. You can get these at very low prices and make a big profit in a short time.

4) Team up with attorneys: There are a number of attorneys who handle property sales on behalf of sellers or in special circumstances (like the death of the property owner). They might sometimes be looking to dispose off the property rather quickly and hence at a low price. Be the first one to grab such real estate investing opportunities and enjoy the profits.

5) Keep tab on the newspaper announcements: Property sell offs due to deaths, divorce settlements, immediate cash requirements and other reason are frequently announced in local papers. Keep track of such real estate investing avenues.

About the Author

For more information and tips about Real estate investing please visit our web site: www.3arealestate.com

5 Tricks To Make It Big With Real Estate Investing.

Real estate investing is one of the most attractive ways of making good money (that is if you do it correct). Moreover, real estate investing is also a lot of fun. A lot of people practice real estate investing as their core profession and, in fact, make a lot of money that way.

Real estate investing is really an art and, like any art, it takes time to master the art of real estate investing. The key, of course, is to buy at a lower price and sell at higher price and make a profit even after paying all the costs involved in the two (buy/sell) transactions.

Generally, people are of the opinion that real estate investing makes sense only when the rates are on the rise. However, real estate investing for profits is possible just about any time (and as I just said, real estate investing is an art). Here is a list of tricks that can make real estate investing profitable for you:

1) Look for public auctions, divorce settlements and foreclosures (bank/FHA/VA): Since quick settlement is the preference here (and not price), you might get a property at a price that is much lower than the prevailing market rate. You can then make arrangements to sell it at the market rate over a short period of time. However, make sure that the property is worth the price you are paying.

2) Looking for old listings: The old listings that are still unsold may provide you with good real estate investing opportunities. Just get hold of an old newspaper and call up the sellers. They might have given up hope of selling that property at all and with a bit of negotiation you can get the property for a real low price.

3) The hidden treasure: A really old (and dirty) looking house may scare off buyers. But this might be your chance for real estate investing that can yield good profits. So, explore such properties and check if spending a bit on them can make them shine. You can get these at very low prices and make a big profit in a short time.

4) Team up with attorneys: There are a number of attorneys who handle property sales on behalf of sellers or in special circumstances (like the death of the property owner). They might sometimes be looking to dispose off the property rather quickly and hence at a low price. Be the first one to grab such real estate investing opportunities and enjoy the profits.

5) Keep tab on the newspaper announcements: Property sell offs due to deaths, divorce settlements, immediate cash requirements and other reason are frequently announced in local papers. Keep track of such real estate investing avenues.

About the Author

For more information and tips about Real estate investing please visit our web site: www.3arealestate.com

Real Estate Investing For Leverage

The term leverage in the world of finance is defined as borrowing money to purchase a company and relying on it to produce enough capital to cover the interest payable on the loan. This is the type of leverage that investment in real estate properties provides.

You do not have to be rich to invest. The goal, of course, is to make money for the long term. The principle is rather simple: spend a little to make a lot. Take the $10,000 you have accumulated in equity, use it as a down payment on an investment property that has a positive cash flow, use the cash flow to pay the mortgage and your investment will appreciate into ten times the original amount over time.

It is interesting to note that after you have invested in a property; your net worth has increased substantially from your initial investment. Let?s take that $10,000 and buy a piece of property with a fair market value of $100,000. The $10,000 is 10% of the value and makes a nice down payment. The mortgage is now $90,000 and you have equity of $10,000. Your net worth has increased by $90,000.

Let?s say the property produces a cash flow of $900 per month. The monthly note on a 30-year loan at 7% is only $598. Your positive cash flow is $302. If you paid all the cash flow into the monthly payment, and if you bought the property in 2006, you would have the property paid off in 2019 ? 13 years ? and the interest you save would be over $121,000.

There are two directions you could go. One is to buy and hold. This means that you buy this property and you hold on to it with everything you have. It absolutely should increase in fair market value. You should see increases in cash flow. You could add these increases to your note and then you could be realizing in a short period of time a nice, regular income from this piece of property. That retirement nest egg would be actively working for you over numerous years until retirement and through retirement.

If you think you do not have the time between now and when you want to retire, think again. The other direction may be for you. You could build some equity in the property we talked about above. Then you could trade up using the equity you built in making double payments and investment tax incentives.

You should always trade up in value or equal in value in order to benefit from the tax savings. When you take this route, you will actually be raising your net worth by much more than equity because you will be steadily increasing your net worth by more than just the cash flow from your investment.

If you were to take the fast-track accumulated equity you have built by paying double or triple the principle each month and trade up to a property worth $200,000 rather than $100,000, you could double your cash flow and pay off the mortgage in 16 years. That would give you a hefty cash flow at retirement with a very small initial investment.

About the Author:

Investment Property Specialist - Alex Anderson Connects Real Estate Investors With High-Quality Investment Properties. Get A Free Copy Of, “The Investor’s Rental Guide” at: www.GreatInvestmentProperty.com

The Changing World of Real Estate Investing

THE REAL ESTATE FAD IS OVER! If you?ve been dreaming of ?Flipping? real estate because you?ve heard of people making a fortune flipping houses - YOU ARE TOO LATE! The real estate fad has come and gone!

Like all fads, the ?Flipping Real Estate Fad? lasted only a short period of time. This is not the first get rich quick fad to occur and it certainly won?t be the last. Whether it?s flipping real estate, day trading stocks, breeding ostrich eggs, or trading tulips, our history is replete with examples of get rich quick fads that took the world by storm and ended badly for nearly everyone.

One of the first recorded examples of a get rich quick fad was the Tulip Craze that occurred in the Netherlands in the 1600?s. Tulips had just recently been imported from Turkey into the Netherlands. Many of the richest Dutch citizens started collecting the flowers and proudly displayed them in their homes. As time went by, the middle class took notice that this flower was so prized by the rich, and also started collecting the flowers. Before long, everyone wanted tulips and tulip bulbs and the prices started going up. As the prices rose, people started trading tulip bulbs as if they were a commodity or a stock. Someone would hear of a neighbor that had traded a tulip bulb and made a big profit. The neighbor also wanted to cash in on this new venture. Before long, it seemed like everyone was trading tulip bulbs. It got so ridiculous, that entire estates and life-savings were traded for a single tulip bulb!

At some point, prices became so ridiculously high that a few smart investors realized that the tulip fad couldn?t continue forever. These ?smart money? investors sold their entire stock of tulip bulbs and locked in their massive profits. Others followed suit and soon it became apparent that the market for the bulbs had disappeared. Suddenly, everyone wanted to sell their tulip bulbs and there were no buyers. In no time, panic selling caused prices to drop so far and so many people lost money that the country?s economy was propelled into a depression. So ended one of the world?s first recorded Get Rich Quick Fads.

Get Rich Quick Fads have continued to occur from the time of the great tulip craze to the present. The technology bubble of the late 1990?s was a prime example of one of these fads. The price of internet and technology stocks soared. Many of these inflated stocks were of companies that had no way to make money. Many thought that the price of technology stocks would continue to go up forever, because ?this time things are different?. RIDICULOUS! The value of a company who can?t make money is ZERO! People were blinded by greed and simply didn?t realize this reality until the crash occurred.

The economy of the United States took a double hit in the first two years of the new millennium. First, the tech bubble burst taking the entire stock market down with it. Then, a small group of terrorists brought our country?s economy to its knees with the attack on the twin towers of the world trade center. In response, the Fed lowered interest rates to a 40 year low. This lowering of interest rates along with the introduction of relaxed lending practices kept our country?s economy strong and opened up the possibility of home ownership (and real estate investment) to more Americans than ever before.

The increased demand for real estate also increased the demand for all real estate services. Homebuilders, realtors, rehabbers, appraisers, lenders, and everyone else in any real estate related business prospered. The demand for houses exceeded the supply and many smart investors began to speculate on houses. This was the birth of the house flipping craze! As the smart money began to make money ?flipping?, the middle class took notice and also started flipping. Before long, it seemed like everyone was flipping property for a nice profit. Demand for houses increased and it seemed like there was no limit to house prices. New investors entering the flipping business drove up the demand for houses, which increased the prices. The more prices went up, the more new investors entered the market and bid up prices even higher. It became a vicious cycle. It got so ridiculous that new ?investors? would camp out in hot markets just for the chance to bid on pre-construction projects.

This vicious cycle continued through late 2005, at which time the real estate bubble started to deflate. The smart money realized that prices had gotten ridiculously high and that the end was near. These ?smart money? investors started selling their real estate portfolios

The real estate fad is over. Demand has dried up and the number of houses on the market is increasing. In many areas, prices have already started down and this trend will surely increase as time goes by. The home buyers and ?investors? who used interest-only loans, negative amortization loans, and adjustable rate loans over the past few years will soon have payments that are drastically higher, when their promotional rates expire. Millions of these people will not be able to afford the higher payments and will lose their homes to foreclosure. All of these millions of additional houses on the market will further depress prices and prices will likely stay low for many years to come. The flipping fad is ending as suddenly as it began. With the lack of retail buyers, there simply isn?t a demand for flipped houses. Millions of the new ?investors? that started flipping during the recent fad will go out of business, losing a lot of money.

Why have I gone to the trouble to write such a gloomy report? Is this story over? NO! The TRUTH is that there always has been and always will be big money to be made in real estate. However, the money to be made isn?t in flipping or in the latest fad!

For me and others like me, the real estate bust will be very profitable. You see, I am not a ?Flipper? and I was not caught up in the recent real estate fad. I am in the rental property BUSINESS and I offer a product that people ALWAYS NEED?..a place to live!

There are MILLIONS of millionaires in the United States?…seven million millionaires to be exact. Many of those millionaires made their money owning rental properties. Rental properties are needed in all markets because people need a place to live. In fact, as the real estate market gets worse, more people will become renters.

Just today, I received a call from a woman who was looking for a house to rent. The reason that they needed a place to rent is that their house had been foreclosed upon. She explained that their mortgage payment started out at $600 per month with one of those gimmick introductory rate loans. Recently, their loan payment had gone up to nearly $1,100 per month and they simply could not afford it. They got behind on payments and the bank is foreclosing on them. Now, they will become my renters.

Why are rentals such a great way to make money, grow rich, build wealth, and retire early? The answer lies in the 5 different ways that we can make money with rentals, often without using any of our own money. The 5 ways to make money with rentals are:

1. Equity at closing!

Rental Properties MUST be purchased at a discount. It is almost impossible to buy a rental property at retail price and then rent it for a profit. The difference between what we pay for the property and the market value of the property is our equity, and can amount to tens of thousands of dollars for each rental property!

2. Cash flow

With rentals, we receive rent from our tenants each month and then pay our operating expenses and the mortgage. The amount of money left over is our cash flow. This is money you can spend for living expenses, to buy a car, for your mortgage payment, or anything else that you like. Cash flow is the lifeblood of every business.

3. Pay Down of Principal

One of the exciting things about rentals is that the tenant pays the mortgage payment and all expenses for us. Over the term of the loan, the mortgage will be paid off and we?ll own the house free and clear!

4. Appreciation

Historically, houses appreciate at 3% to 5% per year. Think of this as the icing on the cake.

Let?s consider a $50,000 rental property. Even if it only appreciates 3% per year, that is another $1,500 in equity that we pick up each year! You?ll note that we didn?t have to do anything to get this equity. All we had to do was continue to own the property!

5. Tax Depreciation

As if the previous four ways of making money weren?t enough, the government has seen fit to allow us to depreciate our rental property. This can be a significant savings on our taxes and is the same as making additional money on your property. As of the writing of this book, properties are depreciated over a 27 1/2 year period. This yearly depreciation can be thousands of dollars per year on a single rental property.

ARE YOU GETTING EXCITED YET?

By reading this article, you have already taken the first step toward improving your financial situation. Where do you want to be at the end of this year? Are you satisfied with your current financial situation? Are you happy working for someone else? Are you in a good position for retirement? Do you dream of the freedom of working for yourself? Would you like to make a significant contribution to your church or favorite charity?

If you do nothing to improve your situation, you will probably end this year in the same position that you ended last year. IF THIS YEAR IS TO BE THE YEAR THAT YOU CHANGE YOUR LIFE, YOU MUST DO SOMETHING DIFFERENT! If you have decided that operating a rental property business might be YOUR PATH TO FREEDOM, then you need to get started. Start with learning all you can about the rental property business and develop a plan to get you from your current position to your desired goal.

Real Estate Investing For Leverage

The term leverage in the world of finance is defined as borrowing money to purchase a company and relying on it to produce enough capital to cover the interest payable on the loan. This is the type of leverage that investment in real estate properties provides.

You do not have to be rich to invest. The goal, of course, is to make money for the long term. The principle is rather simple: spend a little to make a lot. Take the $10,000 you have accumulated in equity, use it as a down payment on an investment property that has a positive cash flow, use the cash flow to pay the mortgage and your investment will appreciate into ten times the original amount over time.

It is interesting to note that after you have invested in a property; your net worth has increased substantially from your initial investment. Let?s take that $10,000 and buy a piece of property with a fair market value of $100,000. The $10,000 is 10% of the value and makes a nice down payment. The mortgage is now $90,000 and you have equity of $10,000. Your net worth has increased by $90,000.

Let?s say the property produces a cash flow of $900 per month. The monthly note on a 30-year loan at 7% is only $598. Your positive cash flow is $302. If you paid all the cash flow into the monthly payment, and if you bought the property in 2006, you would have the property paid off in 2019 ? 13 years ? and the interest you save would be over $121,000.

There are two directions you could go. One is to buy and hold. This means that you buy this property and you hold on to it with everything you have. It absolutely should increase in fair market value. You should see increases in cash flow. You could add these increases to your note and then you could be realizing in a short period of time a nice, regular income from this piece of property. That retirement nest egg would be actively working for you over numerous years until retirement and through retirement.

If you think you do not have the time between now and when you want to retire, think again. The other direction may be for you. You could build some equity in the property we talked about above. Then you could trade up using the equity you built in making double payments and investment tax incentives.

You should always trade up in value or equal in value in order to benefit from the tax savings. When you take this route, you will actually be raising your net worth by much more than equity because you will be steadily increasing your net worth by more than just the cash flow from your investment.

If you were to take the fast-track accumulated equity you have built by paying double or triple the principle each month and trade up to a property worth $200,000 rather than $100,000, you could double your cash flow and pay off the mortgage in 16 years. That would give you a hefty cash flow at retirement with a very small initial investment.

About the Author:

Investment Property Specialist - Alex Anderson Connects Real Estate Investors With High-Quality Investment Properties. Get A Free Copy Of, “The Investor’s Rental Guide” at: www.GreatInvestmentProperty.com

Believe The Dream: What Is All The Hype Surrounding Real Estate Investing Really About?

Real Estate Investing

The best reason for investing in real estate is that it actually works! Real estate investing proves that the American dream is still very much alive. What other avenue can an individual begin in virtually any circumstance in life and build an empire of wealth in a relatively short period of time? Real estate investing does not discriminate against education levels, class, age, or region. You do not need a college degree to understand the fundamentals of real estate investing. You do not need to have a high-paying job or already be wealthy to get started. It can create enormous amounts of wealth for any person who is simply willing to follow the system. There is no need to re-invent the wheel; systems are in place that have been proven for investors in any circumstance or economic condition. You?ve heard similar claims so many times now that they almost sound clich?. Well, even the most skeptical critic will soon see the power of real estate investing as the avenue you?ve been looking for to change your life ? that is, if you choose to get started.

All you need to start investing in real estate is determination, self discipline, creative thinking, willingness to work hard, confidence and a dream. The dream is the most important element. The dream?s power will make the other qualities come naturally. Have you ever struggled to follow through with a project you?ve started? It may not be because you?re lazy or lack self discipline, but because you never had the appropriate motivation. Perhaps the goal wasn?t that interesting to you to begin with, or perhaps you never really believed you could attain it. It is important for you to realize what is attainable so that your dream is not limited. Realizing that you can live a life of abundance makes it possible for you to have the ultimate dream.

I?m not talking about the dream of a nice house, fancy clothes and a sports car in the driveway. The dream I?m referring to is much larger?all-encompassing. It is the dream of freedom. You may think, ?This is the United States. I am free.? Let me ask you, do you own your time? Can you wake up in the morning and spontaneously decide that it is a good day to take the family out on the boat? Can you leave for that month vacation in Hawaii you?ve always wanted to take? Can you sit at home and read a book from cover to cover? Can you take the piano lessons that you always wanted but never had the time or money to take? Can you go back to school for the college degree that you never completed? Can you stay home and raise your children? If you are like most people in this country, you cannot. If you are like most people in this country, you do not own much sunlight in your life. You wake up just before the sun rises, go to work, return home just as it sets and retreat to bed. Then you wake up and repeat the process again and again until, if you?re lucky, you?re 65 years old and you retire?too tired and too old to do all those things that you put on hold until you had ?some time.? You are not free until you own your time. Time is the most valuable amenity that wealth can buy. That dream, the ability to own your time, is really the essence of the American dream. Ironically, it is a dream that few people attain, yet it is readily accessible to all. Using real estate as the vehicle, you can become wealthy, buy your time, and know how it feels to live your dream and be free.

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Mark Pratt is a member of a real estate investing company called http://www.myreiteam.com. He specializes in all types of real estate investing, including foreclosures, short sales, and multiple units. His website provides real estate investing software that allows you to track, analyze, and evaluate your properties.

Real Estate Investing With No Money Down

So you want to get into real estate, for personal or investment purposes, but you just do not have the cash to get you started. Purchasing real estate is still possible even with out a down payment.

Below are a few techniques, provided the seller is willing to negotiate and has a genuine interest in selling the property as soon as possible.

Buying with no money down.

The simplest method for real estate investment is to take over their mortgage payments. This is called assuming the mortgage. Naturally, you will need to be approved by the original lender to assume the mortgage. If you cannot be approved for an assumable mortgage, you may also try a subject to assumption mortgage, which means that you make the monthly payments while the property remains in the seller’s name.

What if the seller asks more than what the balance is on the mortgage?

If the seller wants a higher price than what is owed on the mortgage, you can still assume the mortgage and then get a second mortgage with the seller for the remaining cost of the house. Offer the seller a high interest-only payment for a short period, for example two or three years.

At the end of the term on the second mortgage, you should be able to refinance the property and pay off the seller. Unless there has been a downward trend in real estate, your real estate investment should have gained value in a few years.

There is no mortgage to assume-then what?

A majority of mortgage lenders want to make a good investment. While your local bank may still shy away there are plenty of financial lenders that would love to make a deal and finance your loan.

Finance companies like real estate. The mortgage is usually based on 60-70% of the value of the property, so as long as they know they will get their money back in the value of the property if you default. Complete the deal with a second mortgage created with the seller.

As you can see, there are ways to invest in real estate as long as the buyer and seller work together.

For more information about real estate investing and home financing, visit http://www.realestateinvestmentanswers.com and http://www.homefinancinganswers.com

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