Real Estate Investment - One Simple Formula

I saw the ads in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. It might be a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.

A friend started doing the same thing and explained the process to me. It was a way to get a great return on capital. It was the opposite of buying with no money down. You bought for cash.

A Real Estate Investment Formula

It is simple, really. When you buy for cash, you often get a much better price. A house that needs a little work might be worth $75,000, for example. By offering $65,000 cash, you negotiate your way to a $68,000 purchase price. If not, you walk away - there are always others.

Then you put few thousand into high-return repairs and improvements. Paint, carpet, and maybe asphalt for the dirt driveway. For our example, we'll say you put $5,000 into it.

Now it's worth $85,000 perhaps, but you target those who can't get financing easily, and you finance it yourself. By making it easy for the buyer, you can get $90,000 for the home - and do it without a realtor's commission. Whatever the sales price, you let the buyer put 5% down, and make monthly payments of 1% of the purchase price. Of course, you get higher than market interest too.

The buyer is thrilled that they can buy instead of renting, and you get a capital gain of perhaps $14,000 after expenses, plus good interest. Your total rate of return is somewhere over 25%!

The first to do this cosistently in our town were a father and son. They were both lawyers, and saved money by doing their own foreclosures when necessary. After forclosing, they just raised the price and sold it all over again, of course. By the way, if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years.

Steve Gillman has invested 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

---

Finding the Right Buy to Let Mortgage for Your Investment Property

Finding the right buy to let mortgage is crucial to... Read More

How Much is that House in the Window?

With the recent release from the UK's biggest mortgage lender,... Read More

What is a Home Inspection?

Any Sally and Sam Homebuyer can look at a home... Read More

4 Dangers In Flipping Real Estate

If you have recently purchased some real estate for investment... Read More

How Real Estate Investors Use Mortgage Note To Purchase Properties

Many of you may not be aware of the various... Read More

Tidy Up The Outside, Reap The Rewards

There isn't a realtor in existence who wouldn't tell you... Read More

An Estate Planning Primer

An estate plan can be designed by clients and their... Read More

Trading Inspectors!

As sure as the spring flows at the Fountain of... Read More

Cutting Edge Real Estate: Is There Anything New? Part 1

The world of real estate has pretty much stayed the... Read More

Making a First Impression When Selling Your Home

So you've decided to take advantage of the booming real... Read More

What to Look Out For When Buying Off Plan

Buying Off PlanIt can be difficult to decide when every... Read More

How Do You Profit From O.P.P.?

In a previous article we introduced you to the concept... Read More

Real Estate Negotiation Secrets

When you bought your home, you offered less than you... Read More

A Powerful Suggested Technique for YOUR Home & Property Search

A Powerful Suggested Technique for YOUR Home & Property Search... Read More

According To Sellers, Silence Isnt Always Golden?

When trying to sell a home, silence isn't always golden... Read More

How Come No One Told Us About This When We Were Buying a Home?

Development, it's bound to happen.Simply because there is a large... Read More

Guide To Finding The Perfect Central Illinois House

Central Illinois is an area rich in cultural activities and... Read More

The Real Estate Agent Alphabet

Alphabet Letters after a person's name seem to bestow some... Read More

3 Tips to Help You Sell Your Timeshare - For More

The values of timeshares are constantly changing. There are numerous... Read More

5 Simple Steps to Sell Your House Fast!

The decision to sell your house wasn't made on the... Read More

The Person With The Most Money Wins!

More money can mean better:- Health Care - Relaxing... Read More

Take A Shotgun Approach

An effective real estate advertising strategy entails a 'shotgun' approach.... Read More

What is a Predatory Lender?

Several months ago, the 3,000-member California Association of Mortgage Brokers... Read More

I have a buyer for your property and I can sell it now!

A Realtor has just talked to you and said, "I... Read More

Setting Goals for Real Estate Success

The power of goal setting has been well documented and... Read More

Helpful Hints for First-Time Home Buyers

Buying a house can be a daunting task, even for... Read More

Be Patient Screening Tenants

Rental real estate is a solid way to make money.... Read More

Reinventing Real Estate, Part 2: Online and Empowered Consumers Are Taking Charge and Paying Less

Demanding consumers"Internet buyers tend to be better informed on market... Read More

How To Get Top Dollar For Your Home ? Fast

1. Time is money when selling your homeAfter you've made... Read More

How to Buy a Home When Your in Your Twenties

A Single's Game of Real Estate (Getting started in your... Read More

Purchasing Land: What To Look For

It doesn't take long to realize that finding the right... Read More

Renting a House

Renting a house or a room in your home is... Read More

One Stop Shop for Buy to Let

As the buy to let market continues to go from... Read More