Many millionaires made their fortunes in real estate. They did so through purchasing small single family units up to large multi-unit buildings, put tenants in the units and collected rent.
With the rent payments more than the monthly mortgage payments, they had cash flow money to put back into the buildings or into their pockets.
Over time, the property increased in value, resulting in appreciation. With enough appreciation over time10, 20 or 30 yearscombined with the pay down of the balance of the loan and the increased equity (the amount above the mortgage value), the asset column grew into those cherished seven figure dollar amounts.
How much that asset column grew depended on the number of units. The more units, the higher the equity. The location of the units also played a factor. In order to grow in value, they needed to be in a decent part of town and away from high crime zones.
But do you want to know an even better way to make tons of money in real estate? Simply expand your acquisition strategies by getting deep discounts from banks through short sales.
A growing number of houses today have been refinanced once or twice. The homeowner now owes more than the house is worth and cant afford to make the payments. Many of these houses are thus in foreclosure.
If you know how to get the bank to accept a deep discount on these properties when you buy, you can easily make your real estate portfolio grow.
What You Need:
1) A homeowner willing to sell her house. Typically this only happens when she realizes she has no other way to avoid foreclosure except selling.
2) Documents from the homeowner to prove she can no longer afford the house. These documents include pay stubs, savings account statements, unemployment check stubs, hospital bills, death certificates of the breadwinners, etc. Use these documents to show a decreased income or unexpected expenses-death, funeral, medical bills.
3) An appraiser from the bank to determine the current value of the house. The bank will often sell you the house for that value and frequently settle for even less.
If you and the bank can agree on a purchase price before the sheriffs sale, you get to buy the house and stop the foreclosure. This works well for everyone involved.
It keeps foreclosure off of the homeowners credit report and prevents a plummet in her credit score.
The bank erases a bad debt from their books which keeps their stockholders happy. Also, the banker who worked the deal gets a commission.
And you get a house at a great deal! An extra bonus is that most of these pre-foreclosure houses are in better shape than houses you might buy at the sheriffs sale.
By mastering the short sale system, you can reduce your expenses, increase your profits and help homeowners in distress all at the same time.
Deb McMillan, OPHP, CMI, is a real estate investor and writer, living in Hamilton, Ohio, and has written a home study course on Short Sale Success Systems detailing how to get deep discounts from the bank when buying pre-foreclosures. She has been investing in real estate since 1986 and buying, selling, and teaching short sale strategies since 2000. She teaches how to talk to sellers to get them to do what is necessary to save their credit and reveals strategies to negotiate with the banks to get deep discounts when you buy the real estate. She also teaches about bankruptcy and what you can and cant do once a homeowner files. Log on to http://www.shortsalesqueen.com for more information on how to make your deals close.
