| 1 comments ]

We are in a New Era. Obama. The credit crunch. Globalization. Localization. The economic recession.

Whoah.

The world is smaller. Internationals are looking to buy property here because it is cheap and abundant. There's a fire sale going on and you don't want to miss out.

Warren Buffet said in his famous quote "Be fearful when others are greedy, and be greedy when others are fearful."

My financial mentor by proxy, Robert Kiyosaki says that we are moving from a three class system --the Poor, the Middle Class, and the Rich, to a two class system -- the Poor and the SuperRich. I don't know about you, but I choose to be in the SuperRich class. Guess how most of us will come to be a part of the SuperRich? You guessed it...most will make their money in Real Estate! Even if you, like me have other interests and hobbies, real estate is a great place to start building a nest egg!

Folks, now is the time to let go of fear and get greedy. Not greedy in the bad Mr. Scrooge-sort of way, but get greedy in the let's make it happen now - I have the power to uplift my whole community if I can get my stuff in gear and make some moves in this market - sort of way.

The pundits say that the market will bottom out this year, which means act now. Act soon. Just Act.

So how can you get in now, when the getting's good?

Step 1: Stop Listening To The News.

Alternately, I should say stop internalizing it. The news is driven by fear. There is opportunity everywhere. Realize this before it is too late. People will look back on this time we are living right now and say "Wow - that was when the money was made." In five years you will wish you had acted now. The wealthy are still strong. You can become one of them. Live in the world of infinite possibilities.

Step 2: Get Informed

Use the Internet as your first step. The more informed you are, the better you are able to snag some deals. You can research target markets, trends, neighborhoods etc, and learn about the good deals cheaply and often before everyone else does. Get your preliminary information together. Craft your housing dream. This may include a personal residence or investment residences that you plan to buy and hold for later.

Step 3: Figure Out What You Really Want

After you have done your research, make a list of what it is you really want. Make a plan for what you really want. Maybe you're just starting a family and are a first time home buyer (you get the sweet $8,000 first-time home buyer tax credit!). Maybe you simply want to buy your first home for now, and build up to owning a couple of investment properties that you will rent out. Maybe your kids are grown and you want to rent your home and move into a smaller apartment. Maybe you would like to take a humanitarian role and buy a couple of section 8 homes (which cash flow like crazy!). Maybe you want an apartment building. Maybe you want to purchase some commercial properties. Find something you like that fits you.

Also, figure out what you can afford vs. what you are willing to pay (these can be very different). For instance, I wouldn't recommend paying more than a third of your income toward your property if you are paying off a mortgage.

Some advice and things to consider when deciding what it is you really want:

DO buy in a district with good schools. When you are ready to sell your property, this will count a lot to most home buyers and substantially raises the value.

DO plan for holding costs, such as the mortgage you will be paying while you are fixing your property up preparing it for sale, or while you are finding a good tenant.

DO your due diligence in finding a tenant - a bad one will cause you a world of pain. Spend time up front finding a good one.

DO buy with equity.

DO get a good deal on a home that has been on the market a long time.

DO make good use of the fact that we are in a buyers market.

DO think long-term. A buy and hold strategy works better in this market than buy and flip.

Step 4: Cash, Credit, and Hard Money

Once you have figured out what you want, you need to figure out how you will pay for it. It's no secret that we are in a new matrix. Banks aren't giving away loans like they were two years ago.

1. Cash

If you are among the wealthy and can pay cash - all the better (get those jaws off the floor - there are still, and will continue to be, scores of people that can afford to do this!). My advice is to definitely contact a real estate wholesaler because cash is still king. With a wholesaler you can easily find what you are looking for for as low as 50 cents on the dollar.

2. Credit

If you need financing from a bank, they have tightened their requirements and you will need a better credit score and a good down payment. Regardless, you can still get a mortgage loan if that is what you are looking for. Have a good credit score or raise a poor one. This is not as daunting as it sounds. It can be relatively easy. Pay off old debts. Clear negative remarks. Get some help. It can be done. Next, you will need a 20% down payment.

3. Hard money

Hard money is awesome. They are like banks but their terms and rates are very different. If you are not familiar, find and read a good article on hard money lenders.

Hard money is an option when cash and bank credit are out.

Step 5: Shop for It

Communicate your needs and wants to either an agent or a wholesaler that can help you get what you want. Develop this relationship. Real estate wholesalers often have their finger on the pulse of the deals and they can find you what you want before everyone else does, and at a much cheaper price. Whichever way you decide to go, whether it is with a realtor, a wholesaler, or even on your own through a for sale by owner sale (FSBO), take advantage of the glut of homes on the market.

No matter what you do, you should look for a discount. In this market, the deals are out there and you would be crazy to buy retail.

I would be very wary of those websites and 800 numbers that make you pay for listings of discounted properties, as these are usually scams and/or use old listings that are probably sold already. Also, banks keep information about their failed loans private, so any site that says that they list REOs (bank owned properties) is probably also a scam.

When considering a property, hire your own inspector and appraiser that are looking out for your interests exclusively.

Step 6: Buy and Enjoy

Congratulations! Whether your new purchase is for your personal use or for building your wealth portfolio, enjoy it and build upon it. Keep moving toward your goal of joining the SuperRich.

by: Miko Crawford

1 comments

CoachingByPeter said... @ July 23, 2009 at 9:54 AM

Learning about real estate also involves knowing what areas are going for and being able to calculate what a property is worth. This comes from years of knowledge and you can add this valuable tool to your arsenal by doing research. You should try to view as many properties as you can and start learning how to judge there worth.

Post a Comment

Make a comments but don't spam