Welcome to Your Online Guide To Real Estate
Northeast Real Estate Agents Article
This is a selection made from among articles on Northeast Real Estate Agents. For a permanent link to this article, or to bookmark it for future reading, click here.
A Real Estate Formula
from: Steve GillmanIt was a simple real estate formula. The ads ran 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. Maybe a three
bedroom home for $90,000, for example, with $4,500 down and $900
per month payments.
When a friend started doing the same thing he explained the
process to me. It was a way to get a great return on capital,
and it was the opposite of buying with no money down. There is
no down payment at all when you buy, because you buy for cash.
The Simple Real Estate Formula
You probably know that when you buy for cash, you can often get
a much better price. With no financing contingencies in the
offer, and the promise of a faster closing, sellers are willing
to sell for less. You can offer $95,000, for example, on a house
that might be worth $108,000. If you can't get it for less than,
say, $99,000, you walk away - there are always other
opportunities.
Once you buy the house, you put few thousand into high-return
repairs and improvements. These might include paint, carpet, and
maybe asphalt for a dirt driveway. For our example, we'll say
you spend $5,000. Let's suppose the house is worth $116,000 now.
You're ready for the next important step in this real estate
formula.
You put it up for sale, targeting buyers who can't get financing
easily. You provide the financing. Because you are making it
easy for the buyer, you can get more than the $116,000 value for
the home - and do it without paying a realtor's commission.
Let's say you sell it for 123,000. The buyer needs a down
payment of just 5%, or $6,150, and makes monthly payments of
$1230 per month. You charge higher interest than the going rates
at the banks, of course.
This is a win-win situation. Your buyer is able to buy a home
instead of renting, and you get a capital gain of perhaps
$16,000 after expenses, plus good interest. Your total rate of
return will often be over 20%!
In our town, the first to do this consistently were a father and
son team of lawyers. They saved money by doing their own
foreclosures when necessary. Once they foreclosed, they raised
the price and sold the home all over again.
They made millions. Did you know that 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? That's the power of
a good real estate formula.
About the author:
Steve Gillman has invested in real estate for years. To learn
more, get a free real estate investing course, and see a photo
of a beautiful house he and his wife bought for $17,500, visit
nderFiftyThousand.com
 |
 |
Northeast Real Estate Agents News
Seattle home sales drop - Seattle Times
A real-estate-agents trade group says sales of existing homes rose 3.1 percent in July as buyers snapped up deeply discounted properties. Stephanie Kuhn — who moved in March from the Seattle area to Orlando, Fla., because of a family emergency ...
Read more...UPDATE 5-Thai rail starts partial strike in anti-govt rally - Reuters
BANGKOK, Aug 28 (Reuters) - Thai rail workers began a partial strike on Thursday, joining a protest by thousands of people barricaded inside the prime minister's official compound whose leaders vowed to stay until his government fell. As many as 80 ...
Read more...U.S. home prices still falling, but more slowly - International Herald Tribune
NEW YORK : U.S. home sales have begun to stabilize as sharply reduced prices lured buyers back into the market in July, according to a pair of reports issued this week. And prices, once plummeting at a breakneck pace, fell in June at a more moderate ...
Read more...Iconic Stone Church fights for survival - Fosters Daily Democrat
John Huff/Staff photographer A mural at The Stone Church in Newmarket pays tribute the array of musicians that have come through the doors over the years from the likes of Patty Larkin to Phish. Seacoast music fans try to remain optimistic that Sept ...
Read more...Wichita area home prices bounce up - Wichita Eagle
Wichita real estate agents got another positive piece of information Tuesday: Home prices appreciated by 3.34 percent between the second quarters of 2007 and 2008. Prices rebounded from slower-than-expected 2.59 percent growth in the first quarter ...
Read more...