Investment in Real Estate - Finding the Money
Did you know that making an investment in real estate could be your ticket out of the rat race?
Of course, only buying one investment property isn't going to earn you enough to quit your "day job" so you can retire early.
However, once you buy that first property, you're now on your way down the proper path.
Pulling from my own experience and from talking to other investors, I realize that money is what stops most people from getting started in real estate investing.
If you're holding back from investing because you lack the money, let me address this issue for you.
There are many ways for you to "find the money"; some immediate, some that take some patience. But, it is possible to find money to invest in real estate, no matter your current situation...
"Owning a home is a keystone of wealth.. both
financial affluence and emotional security."
- Suze Orman
Investment in Real Estate
Stop Wasting Your Money
I want to show that it's possible to save enough money over time to purchase a piece of real estate simply by changing some of your current habits.
- Instead of buying your clothes at the highest retail prices, shop for sales. Find consignment shops or discount outlets. Buy several of the same outfit once you find a great deal.
- If you have large balances on credit cards with high interest rates, roll them onto those zero-6% teaser rate cards to save on the interest. When the teaser period ends, find the next one (just watch the transfer fees & don't add more debt!).
- Save $30-$50/month by eliminating the carelessness regarding your electricity at home.
- Why are you renting or buying older books or videos? Check out your local library instead.
- Are you purchasing subscriptions to newspapers or magazines you don't need? Especially when most of this info is available online?
- Save money on your food. Shop at Costco or Sam's Club. Don't shop when you're hungry. Avoid junk food. Look for sales. Use coupons.
- Buy airline tickets early. Use the Internet or use an agent who has access to low fare programs.
- Buy holiday related items right after that holiday ends.
- Continually check for the lowest auto insurance.
- Pay attention to the local gas station with the lowest prices.
- Buy the big screen TV or new car after you've purchased real estate.
- See new movies at the matinee.
- Save $5-$15 a day by bringing your own lunch to work.
OK, I know, some of these ideas don't add up to much... but they do add up.
If you save $10/day on lunch for 20 work days a month, that's $200 per month. That's $2,400/year. Depending on your market, that could be the down payment on your first property!
Investment in Real Estate
Use Your Good Credit
If you've been responsible over the years, you should have good credit.
Use it!
Find a trustworthy mortgage broker and look into taking out a loan to get into that first property.
You'd be surprised what a high credit score will do for you, even in this tighter credit market we find ourselves in today.
There are so many loan products available today that even in high priced areas such as California, you should be able to locate a property and loan that comes out in your favor.
Investment in Real Estate
Use Your Equity
Do you currently own your personal residence? Well, maybe you don't technically own it yet, but you may have equity that you can "tap".
This equity money can be your ticket to investing in real estate.
Example:
- Current value of your home: $250,000
- Original purchase price: $175,000
- Equity: $75,000
- Borrow 90% of your equity: $67,500
- Original payment (at 8%): $1,284/month
- New payment (5.75%, let's assume you've improved your score): $1,415/month
Look at that. For only $131 more per month, you now have access to about $65,000 in TAX-FREE cash that may very well get you close to $1 million in real estate investments!
Investment in Real Estate
Use Your Tax-Sheltered Money
Depending on your investments, you may very well have been hopelessly watching your stock, IRA, or 401(k) investments fall over the last few years.
Back in my financial planning days, I witnessed many clients gaining only 2-5% on their IRA's or 401(k)'s. At the same time, I know that many times real estate returns can be as high as 100%.
Did you know that you can borrow up to $10,000 from your retirement account in order to purchase real estate? Some 401(k)'s allow withdrawals of 50% that can be paid back over 10 years.
Not too bad when you look at what you could be earning on that money in real estate over that time period!
Investment in Real Estate
Just Get Started
Granted, I've provided examples of what could happen and unfortunately (because of our litigious society) I must warn that all situations are different. You could just as easily lose money in real estate as make it.
If you do proper research, though, and surround yourself with professional agents, brokers, and tax people, you should be able to do very well for yourself.
I've only mentioned four ways to find the money to invest in real estate. There are many more. Use your "thinking cap" if you must, but find a way to do this.
Where are you going to be in five to ten years if you continue working your job and making your boss rich?
"It's tangible, it's solid, it's beautiful. It's artistic,
from my standpoint, and I just love real estate."
- Donald Trump
Change your life,
Matt
Interested in ongoing Investment in Real Estate info? Join my Monthly "Achieving Life Abundance News" Ezine and receive 1 FREE E-Course & 2 FREE Special Reports. Just fill in your Email Address and Name below:
Free Report/E-Course Details
Privacy Policy
Move from Investment in Real Estate
to Becoming More Comfortable Financially page
|
