Tuesday, February 23, 2010

What Are Some Good Investments With Quick Returns?

This question reminds me of the genie who grants 3 wishes. What would your wishes be?

Hopefully, one of your wishes... would be to wish for more wishes! ;-)

There are courses available online about "How To Raise Private Money" which cost anywhere from $500 dollars to $2,000 dollars. Basically, you can learn how to get other people to lend you money to buy steeply discounted real estate, and it is a great time to buy in this market!

There is no limit to the amount of private money you can raise. You can raise millions of dollars, if you'd like. Then, you can buy great deals on real estate that are 50% or less value. If the house doesn't sell, you can offer owner financing or lease option as an exit strategy and partner with people who have money to invest.

There is a reason why the bank won't lend you money to speculate on the stock market, yet they will lend you money all day long to buy real estate.

There is also a reason why real estate is insured, but stocks, bonds and mutual funds are NOT secured by the FDIC.

Banks and insurance companies are the two most powerful institutions in America. Part of being a great leader is being a great follower!

Why invest your own money into something that is not secure?

With real estate, the loans are collateralized by the real estate itself. Which is why it is so easy for you to get backing on good real estate deals, because even if you fail to sell it - your investors have a steeply discounted piece of real estate to show for it.

If you fail in the stock market, you may as well flush it down the toilet.

Also, you can't rent stocks and make a monthly, residual income off of them.

If my property doesn't sell, I always have the option to offer owner financing or rent it out.

Let's say I find a house worth $100,000 for $60,000 because the owner is motivated to sell.

I have a private investor back me on the purchase for $60,000 and pay them 12% interest on the loan. They want to lend me the money, because they know it is a great deal, based on the appraisal.

My payment is $600 per month. And let's say that during the 6 month period, I can't find a pre-qualified buyer. Well, I have several options:

1. I can offer owner financing, and get 10% down from a buyer. This is in very high demand, because banks aren't lending money right now.

2. I can lease out the property, and cover my mortgage payment.

If I rent the property for $850 per month, I make $250 per month cash flow, plus I have $40,000 equity in the property. But best of all, I never used a dime of my own money.

If I want to go to the bank and refinance it (if you have good credit) you can pull out between $10,000 to $20,000 cash and refinance your investor out of the loan. Or, your investor will be as happy as ever to get a 12% return while your new buyer or tenant keeps on making the monthly payment.

Also, in certain areas you can expect the property to appreciate in value, especially in the midwest. So, that same property that appraises for $100,000 now may be worth $105,000 to $110,000 in the next two or three years.

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