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San Diego real estate library
Real Estate Investing 101
The recession is here and is gradually falling. This doesn’t
mean you can’t make money anymore. This is a buyer’s market and
the recession has not hit it's low YET. In fact, now is the
absolute PRIME time to purchase.
Real estate is one investment that is desired by everyone.
Everyone needs a place to live. If you cannot afford to purchase
a home of your own, you have to rent. One way to make money in a
down real estate economy is to buy a home on the verge of
foreclosure where the residents are still living in the home.
By purchasing a home that is on the brink of foreclosure, you
can allow the previous owners to stay in the house and continue
to make payments to you as their landlord. You will be getting
all of the tax benefits as well as be the ultimate owner of the
home. You can refinance the mortgage so that the interest rates
are lower and the mortgage rate is much less than what the
people were originally paying. You can help them out of their
bind by lowering their monthly rent payments and allowing them
to stay in their home for a period of time until they can afford
to either buy the home back from you or move on.
If they cannot afford to carry on living in the home any longer,
you can rent the home out to other people. The home will be a
long term investment for you as well as a tax write off. If you
are ready to invest in real estate in this manner, make sure
that the home is located in a solid area where the property
values are increasing. In a few years, the market should rebound
making your home worth a lot more than when you purchased it.
In a lot of cases, a person who is on the verge of foreclosure
has no idea what they can do to help themselves. If they have
children who are attending a nearby school district, they do not
want to uproot them. You can help them and make a wise
investment if you purchase the home before it goes into
foreclosure. This is known as the short sale and you will be
merely assuming the payments as well as the incurring the debt
from the bank. Since banks rarely lend out more than 80 percent
of the value of a property, you are already getting, at the very
least, a 20 percent discount off of the home. The longer the
people have lived in the home, the less they likely owe for the
mortgage. You will assume the mortgage payments, refinance the
property at a lower interest rate and then rent the home to
them.
This will make the people who are on the verge of foreclosure
happy to be able to stay in their homes as well as have the
possibility to make you some money. If they have gone into
foreclosure because of some suprising circumstance that will be
alleviated, such as someone losing their job, you can make them
an offer to rent to buy, which means that a portion of their
rent can be used as a down payment if they want to buy their
home back when things get better. It is very important to have a
real estate attorney draw up any rent to own agreement. If done
correctly, either way, you can make a solid investment and have
renters who will most likely take care of the home.
San Diego real estate library |
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