Is it true real estate investing
is only for the wealthy? Can you buy with 0 down? Do you need
to know the "right" people? Let's take a look at some
of the myths of real estate.
1. Real estate is for the wealthy.
Of course money helps, but my first real estate investment was
a $3,500 lot - which I sold for a profit two weeks after I bought
it. Small deals, using partners, low-down deals, or just putting
aside $8 per day for a couple years until you have enough money
for a downpayment - these are some of the ways to start with
a little and invest in real estate.
2. "0 down" is near
impossible. I sold a rental property for $1,000 down. I trusted
the buyer, and I wanted the 9% interest and higher price. He
could have gotten a credit card cash-advance for another $30
per month and made it a "0-down" deal. "No money
down" simply means none of YOUR money down, and yes, it
happens.
3. "0 down" is the
best way to buy. Don't invest your own money, and you'll have
higher payments, spend more time finding suitable properties,
and pay more for them (generally cooperative sellers want more
for their cooperation - I do). Zero-down deals are out there
- they just aren't always worth doing.
3. Experience is required. You
get experience by investing. Use common sense, ask how you can
lose money, be willing to learn the numbers, and you can start
where you are.
4. Certain investors have a
"knack" for making money. Sort of, or some just took
the time and risk to learn the market and continue their education.
5. You have to know the "right"
people. It helps, so start the process by talking to investors,
real estate agents, landlords, etc.
6. You need to be great negotiator.
Run the numbers and make the offers based on them, and you can
be the worst negotiator and still do okay.
8. You need "insider knowledge."
You're on your way as soon as you understand one deal. Read and
read some more, but the best "insider" knowledge comes
from experience.
9. Fixer-uppers are safer investments.
People have the idea that doing work themselves is the safest
way to assure a profit, but mis-planned "fix and flips"
have bankrupted even experienced investors. Most poorly purchased
rental properties will only eat a little money every month, not
bankrupt you.
10. It's best to make "lowball"
offers. It's best to make sure the numbers work, and to have
a plan. You can offer MORE than market value and make money investing
in real estate, if you understand creative financing - and how
to do the math.
Real estate myths are a mix of
half-truth and mis-understanding. They are often pulled out to
excuse mistakes due to a lack of research, or worse, to excuse
never getting started. Real estate is still a great investment
- just learn what you need to know
Steve Gillman has invested in
real estate for years. To learn more, and to see a photo of a
beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com
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