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Sample Issue
"Real Estate Investing is just an idea, a concept
we master..."
In This
Issue:
1. Why Real
Estate Investment?
2. Common Misconceptions About Becoming A Real Estate Investor
3. Disadvantages of Investing In Rental Real Estate
4. Working Smarter, Not Harder To Become A Successful Real
Estate Investor
5. Show Me The Money - How To Attract Financing For Your Real
Estate Investment Property
6. Preview for the Next Issue
1. Why Real Estate Investment?
Why all the talk about real estate investing? A lot of reasons.
1. Well, for starters, investments in real estate has produced
wealth for millions of average Americans.
2. It's simple, it's easy to understand, real estate investment
property is tangible.
3. Real estate holds its value pretty well, often grows in value
at a pace faster than inflation.
4. Your real estate investments are capable of producing phenomenal
profits and returns on investment if bought and sold right (we'll
talk more about what "right" means).
5. Real estate investment properties could be a great rental
cash flow vehicle, you can get nice monthly payments that could
potentially replace your dependency on a paycheck
6. Investing in real estate has a residual income potential: you do
the work once and continue to get paid many months and years
later.
7. Real estate can provide high rate of return, maintenance
and management free investments for people who've already accumulated
cash - by investing in mortgages secured by real estate, or
buy creating your own note with owner financing.
8. Finally, real estate investments have preferential tax treatment
allowing for valuable write-offs, and tax deferred treatment
for profits from capital gains on sale of the property.
2. Common Misconceptions About Real Estate Investing
Typically, the main argument of real estate 'nay-sayers' is
by associating real estate investments with toilets, bad tenants,
damages, evictions, etc. - all the bad things that may happen
to an investor getting ready to jump into the real estate
game.
For somebody who believes the only thing to real estate is
getting a loan and buying a run-down duplex in a bad part
of town real estate could certainly turn into a major nightmare
very quickly. However, an individual open to possibilities and willing
to learn will quickly discover - that's not the way to be
doing real estate.
Much more profitable strategies exist for doing business without
management headaches, without having to deal with bad clientele,
and without having to constantly worry about how often one's
tenants clean their toilets.
Modern real estate thrives on doing things smarter, not harder.
3. Disadvantages Of Investing In Rental
Real Estate Properties
One of the major disappointments of the conventional, 'rental'
approach is there's just no money in it NOW, only after a long
period of ownership.
There's not enough spread between the income from rent and the
expenses of mortgage payments and repairs for the investor to
make any money today.
You barely get by in the early years of your ownership of the
property. You've got to have other income to support your lifestyle,
you can't just count on the rentals to support you.
Most likely, in the beginning you'll be supporting your properties
with your other income. That's not too attractive.
Yes, if you stick to it, there's a pot of gold at the end of
the rainbow. In fact, I will be selling one of my rental properties
within next year or so, at a profit of $172,000.
That's a lot of money for most of the population of the United
States. Bought it for $128,000 and today's market value is $300,000.
But it took long 8 years of management and maintenance headaches.
Trust me, these were REAL headaches: vandalism, fire, evictions,
rent loss, repairs, etc.
A lot of us don't have the stomach to endure the rough and tough
financial stresses of the rental business. Even more people
don't have the desire to. I certainly didn't enjoy it.
4. Becoming a Successful Real Estate Investor
Working smarter, not hard is the key. The good news is, there
are better and faster ways to make money with real estate. I
discovered them while waiting for my rentals to increase in
value so I could sell them.
For instance, not long before writing this issue (this issue
was published in May 2001) I sold 4 homes with a gross profit
of about $160,000. All of these homes I bought in the preceding
90 days.
That's not bad for 90 days of work. In reality, however, I didn't
spend but 8 hours of work into each transaction. If you ask
me that's a high rate of pay for some 40 hours of work.
I've only been to each of these homes once or twice: first to
sign the purchase contract with the Sellers and then to check
upon the completion of remodeling by my contractors.
I've exchanged a few e-mail messages with several prospective
purchasers. I spent a few hours in front of my computer preparing
the paperwork and another hour or so to meet with each Buyer
in my office to sign the papers.
All my clients are nice people who are extremely happy to do
business with me and grateful to be able to benefit from my
service.
However, a very important part of our relationship -
it's not Landlord/Tenant like. They'll never call me on the
phone if something breaks. I just don't want to hear about faulty
toilets, leaky faucets, A/C not cooling enough, etc.
I do deliver the homes in good repair and condition at the time
of sale, though. After that, it's Buyers' responsibility to
take care of them.
5. Attracting Financing For Real Estate Investment Projects
Show me the money!
That's the first question I always hear from the beginning
investors: Where do I get the money to buy homes? I need to
finance my deals. I ain't got any money, so how can I be successful
in real estate?
Let's make one thing clear: You Don't Need To Have Your Own Money Or Credit To Make
A Ton Of Money With Real Estate.
Please note, I didn't say you don't need money or credit.
I said you don't need your own money or credit.
Some strategies don't call for any money - we’ll talk
about them in future issues.
Others do require some forms of financing. But
you should be worried about other things than your ability
to get conventional financing, when you start. You need to
get good at understanding what a bargain deal is, what a favorable
financing is, and how to find bargain deals, or deals with
favorable financing.
Either one of these two will translate into profit very easily.
Once you get to that point - the money will flow to you. This is profound.
I didn't have money when I started and I still don't use my
own money, most of the time.
People with money are always looking for people with great
safe ideas and projects. And you'll be supplying those
great projects. You'll find the deals and then you use OPM - other people's
money to fund the deals. The money does have a way of finding
its way to you, once you have a reputation.
Real Life Example:
What May Happen After You've Been In Real Estate Investing
Game For A While
Just a month ago, a man walked into my office with some serious dough.
He wanted to write me a $100,000 check on the spot and buy
partial interest in some of the deals I had in my pipeline.
Because he didn't have the "know how" to put these cash flowing
deals together. Most of my homes are producing a NET positive
cash flow over $400-$500 a month. That's after paying the
mortgage.
For someone with the capital and no free time to work on putting
these deals together - it's a great opportunity to invest
money at high returns -- without having to do the hard part,
creating the income stream.
You shall be able to develop this kind of magnetic power over
money once you start learning and practicing your real estate
skills.
In The Next Issue
- Two (2) powerful strategies for making money with real estate
investing - without maintenance and management hassle.
.....Until we meet again in the next issue of the 'Real Estate Magic'
E-zine, your source for ideas and inspiration for creative
and profitable real estate deals.
Alex Gurevich
investor & publisher
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By Alex Gurevich
Real Estate Investment Newsletter
Here's What Our Subscribers Are
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and techniques in my lease options. I was able to find many private
lenders to help fund my offers and get them accepted. This enabled
me to make more offers that previously I had to pass on due to lack
of funds.
Also,
I was able to pull some cash out of existing deals. Now I am following
up Alex's lead to make money on the Internet so that I have multiple
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