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It used to be that “people” made decisions about your credit worthiness. You knew your banker and your handshake was all the collateral you needed. Those days are long gone, and now a single number – your FICO score – determines your credit worthiness.

Several credit models can be used for this article, however we are going to focus on the Fair, Isaac Company model. Better known as FICO.

Your FICO score is the method used to determine the interest rate as well as how much credit a bank or lender is willing to give you. the cleaner the credit…the lower your rate and larger the sum you qualify for.

Getting and improving your credit score is not hard at all, just takes time. Here is a tip or two that will help you improve and increase your score.

FIRST: You need to get a copy of your credit history

There are many reasons you may have no credit history. Maybe you’re just starting out, maybe you pay cash for everything and have never needed a loan. In any case, if you have no credit history, your FICO score is likely to be low.

The easiest way to raise your score is acquire a loan, and pay it off on time. In general, installment loans are weighted more heavily than credit cards. In other words, you will improve your credit score faster if you buy goods with an installment loan, rather than acquiring a credit card.

Another option is to take a $1000 and open a 6 month CD at a bank. Now turn around and get an installment loan using the CD as the collateral. You then take that $1000 loan and do it again at another bank. Do this for a total of 3 times.

Now what you have is 3 loans. Pay the minimum payment for 6 months. In the last month, cash out your CDs and pay the loans off. You now have a credit history, and did not go into long term debt to get it.

SECOND: Keep your credit history clean.

Ok…now you have a good history. No major debt…now to keep the FICO as high as you can.

You don?t need to close old accounts. (Unless you?re being charged a fee to keep the account open.) Part of the FICO formula is based on the amount of credit available vs. how much you have used.

Another thing to be aware of is how you manage your money. Here?s the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here’s what happens – your credit card company reports your credit information monthly to FICO. However if they report it on the day before you pay it off…the credit agency sees you carry a balance every month. If you can try changing the days you pay off your credit card.

THIRD: Fix your bad credit

At some point there is a very good chance you will have something that causes your credit rating to drop. Don’t panic…poor credit can be fixed. Understand however that the process takes time. In some cases you may need to talk to a credit counselor to assure you address the reasons for the drop as well as remove any future habits that may cause it to drop again.

The most heavily weighted part of your score is based on your payment history. The first thing to do to start repairing your credit history is to pay your bills on time. The mortgage is the most important, followed by installment loans, and finally credit cards.

The next largest factor on your credit is how you have used it. You can improve it by paying off your credit cards.

One final thing to look for is errors in your credit report. Get a copy of your credit report from all three primary agencies, and look at all the entries. You can find the agencies here: experian.com, equifax.com, and transunion.com. If there are any errors, start the process to have them removed. Call your creditors – sometimes they will remove negative information.

A strong, healthy, and clean credit score is a major part of your financial world. Keep it clean and don?t risk it. A good score can factor into things you can’t imagine. Don?t damage your score if you can help it.

One of the most common bits of information the Real estate investors always ask each other is “What tricks of the trade or inside tidbits can you share with me??” I always answer this question with a question…”What tools do you have in your investment toolbox?”

OK…Hey Doc..what do you mean “Tool Box”. Okay…let me explain it ad tell you the 3 important areas that make it up.

1) Grey matter tools: This is the in your head part of the tool box. It is the manner in which you think about investing, the guidelines you use to select investments as well as ALL the information you call on every time the prospect of an investment even shows its self. It is the investment filter you have developed for yourself.

It is the resaults of the information you have taken in about investing.

IMPORTANT ELEMENT. While we all know that a zillion books have been written about investing. It is important to understand that you MUST have some knowledge from that book…WHY? Because if you understand what other investors are reading?it actually makes it easier to work with them since you understand where they are getting their basic tactics and understanding from, that helps steer them to the investments THEY are making.

2) Online tool box: This is one of the most over looked elements…when I say over looked I am not referring to being not utilized…but more to the fact it is not utilized to its overall potential. For example do you have one site you go to more often than not for investment information? If so why? Your answer is most likely because they have the best info I can use. This maybe the answer however, a little side note to this. Most of us get some sort of tunnel vision thinking that one or even a few sites will cover us for all the info we want…but in all honesty we normally close down other avenues of “information input” when we do this. How do we get around the “Info input” shut down???

Ok so how do you avoid Info input shut down? You have to open your tool box up to get some fresh tools.

Simply put you create an email address and when you come across a site you think may be a useful reference you join up for the newsletter they email out. They send it to your “Info email account” and you can go thru the emails as you choose. I must warn you however.

Once your on a email list I suggest allowing a few weeks before opting out of it. Just because it doesnt give you the “diamond in the rough” on the first email doesnt mean the newletter your getting is worthless. Newletters to look can originate from RE investment clubs, Blogs, News sites…etc

I ,myself, avoid most ad based emailing lists. however, that doesnt mean that all of them are a waste of time. review a few and decide for yourself if they are worth keeping.

The most inportant sites to me are the ones that make the investing game easier. sites that offer me something for free or VERY little cost out of my pocket. Some websites have tools that you just cant wait to try out. (I will admit I have a few sites I visit daily just to play around on and try out the tools they offer) When you find them you will know it…once agian bookmark them.

3) And last but not least… actual physical, hold in your hand, tools. It can be a great “go by list”. A solid flash light. anything that makes the time in the field looking at investments easier.

So there it is..the outline to your toolbox. Build one…update it often..and USE IT DAILY.

People everywhere are talking about how great and easy it is to begin making money with real estate short sales; however is it really easy to begin profiting and making huge money with real estate short sales?

While there are actually people making money using this method; the truth is that it is not for everyone. So how do you know if you should begin your real estate short sales investing journey or not?

Money: While there are methods for getting a hold of a home without using any of your own money; the truth is that if you do not have some money on the front end and you end up having to hold onto the home for longer than you thought; then this could be a financial disaster for you.

Regardless of all the hype that you see on television or anywhere else; the truth is that you should always have money for your projects.

Set Goals: What is making you want to consider real estate shorts sales investing? Set a goal and find out what you would like to accomplish and how much money that you would like to make.

Team: Everyone who becomes involved with real estate investing understands the importance of having a great team on their side. You can not do all the work by yourself therefore it is important to find out what it takes to begin making money with real estate.

Invest In Education: If you really want to give the real estate investing path a go; then you have to take the time to invest in education. It will be money well spent and will help you become a success.

Visit our site below and get all the details to actually making money with real estate and do not forget to sign up for our FREE ecourse that will give you some great tips on investing.

There are a lot of investors that end up making the mistake of selling their business or investment property but have to pay thousands of dollars in capital gains taxes to the IRS. What they may not know that there are tax laws that provide them the ability to defer all of the capital gains taxes on the sale of property which has been held as a trade or business – thereby retaining their gain.

This law defers and can even eradicate taxes you would normally have to pay if you were selling your property. However, the money you make from selling your property must be used exclusively to purchase a like-kind property that you also intend to use for business or investment purposes.

When you take advantage of the 1031 exchange laws, you can save a lot of money, thereby allowing you to leverage your equity by purchasing even more property (which may have not been possible without the added tax savings).

The 1031 Exchange law has benefited many, and I assure you that you can reap many rewards from it yourself. In order to reap those rewards, there are some specific procedures you need to follow.

First, it?s important for you to choose a well respected and professional qualified intermediary also known as a “Q.I.”. Dealing exclusively with doing 1031 exchanges, a Qualified Intermediary is an expert with the facilitation of such a deal.

Your Q.I. provides a written agreement to change the transfer from and outright sale to an “Exchange” then transfers your relinquished property (that you are selling) and takes that money and uses it to purchase your replacement property on your behalf.

To qualify for your exchange, you will need to follow these rules:

1. Firstly, the investment property that you are replacing must have been used for investment purposes or use in a trade or business and must be “like-kind” (i.e. real estate in the United States for real estate in the U.S.).

2. Secondarily, you will need to locate a property to replace your property if you have not yet done so, and make sure it is identified clearly in writing within 45 days to your Qualified Intermediary. It is necessary to close on the sale on the replacement property within one 180 days.

3. To defer your capital gains taxes, all of the proceeds from the sale of the first property must be used to purchase your new replacement property.

Follow these 1031 rules and you will be in the best position to faciliate your exchange. The steps are very simple and even if the road along the way gets a little complicated, in the end it will put a big smile on your face. Do something good for yourself by retaining your capital gains with a 1031 Tax Exchange!

A Short sale is receiving the bank to allow less and owned full payment. Normally, it is the sale of stock which not own. The price of the stock will fall when the depositor believes short. If the price drops, make a profit by purchasing the stock with lower cost. If the stock price increases and purchase it back later at the higher price, it will deserve a loss.

The protections against abusive short selling are vital for issuer and share holder assurance and have endorsed prophylactic rules considered to curtail scheming behavior are held traditionally. It is one of the primary reasons for securities borrowing, without which, short selling would be impossible. The Pioneer spread between the cost of the long stock and short stocks are exposed by the long-short positions when the long and short positions are for equal number of shares.

Including different costs and risks of shorting, as well as legal and institutional restrictions and allowing stocks to be overpriced are the constraints of short sale. Make a guide of expensive stock leading to consequent low returns. The portion of mortgage of higher price of a home provided buyer willing to buy the property when the lender agrees transpires short sale. The difficult purchaser real estate business deal to agree, involve as much, and no more paperwork than an original mortgage application. The seller already owns the item at the time of the short sale. Short sales of securities are not registered on an exchange and connections in securities covered by paragraph that are resulted in the OTC market. However, they are not subject to rule. These are also used in strategies of hedge a situation in another security or a linked economic utensil.

The present transaction is not always in short sale real estate. Real estate short sale is negotiating a lower cost for a home which is owned to the bank. The sale of a house in which the progress fall short of what the house owner still owes on the finance. Number of lenders agreed to deny the proceeds of a short sale and exonerate the other of what is owned on the credit when the owner cannot make the mortgage payments. The lender can keep away the lengthy and costly foreclosure, and the owner is capable to pay off the loan for less than what he owes, these are done by accepting a short sale.

Short sale came in to the observation of credit report as “pre-foreclosure in redemption”, but as “debt discharged due to foreclosure”. No guarantee for a lender who accepts short sales are not legally pursuing a borrower because the difference between the amount and the amount paid. This amount is known as deficiency in some states. All credit debts is fully discharged. Profit is the difference between the price at which the stock sold and the price to buy it back, minus commissions and expenses for borrowing the stock. The cost of the shares rises, the potential losses are unlimited.

With the economy heading downhill, more and more people are hearing about real estate short sales. The concept of real estate short sales is not new to most experienced real estate investors but for a homeowner it is an eye opening concept worth knowing about.

There are no need for real estate short sales if homeowners do not have mortgages larger than the worth of their homes. You can say that real estate short sales are invented to help homeowners get out of the upside down mortgage situations. When a homeowner is upside down, he or she owes the bank more than he or she can sell the home for. If a home is worth only $100,000, for example, then the homeowner cannot afford to pay off a mortgage that is more than that amount. He or she is basically “upside down.”

Homeowners with upside down mortgages have one solution left to them; Real estate short sales. For a home that is upside down, even if the homeowner were to sell it on the market, he or she wouldn’t make enough money to pay off the mortgage balance and will still owe the bank even when the home is gone. This can be a real financial burden on the homeowner. Many people in this situation end up filing bankruptcy.

With real estate short sales, the lenders are willing to accept the amounts less than the actual amounts owed by the homeowners. For example, if Bob owes $200,000 in his mortgage payments and Bob cannot afford to pay them ongoing. Even worse, Bob’s house is valued at only $150,000. Bob has no choice but to do a real estate short sale or he would end up in a foreclosure or have to file bankruptcy. If the bank accepts a real estate short sale on Bob’s home, Bob walks away from the debt free and clear.

One problem is that Bob cannot stay in his home after the bank accepts the real estate short sale. In other words, Bob cannot do the short sale himself. This is because if Bob shows that he could afford some payments then the bank is less likely to want to forgive the debt. Too many people tried to con the banks into accepting less than what they owe even when they are not in financial trouble at all.

For a real estate short sales to be accepted, there must be a buyer who is not the homeowner. The buyer must be convincing enough to show the bank that it is in their best interest to accept the real estate short sale. For example, if the homeowner has lost his or her job, just gone through a divorce, has piles and piles of medical bills, then the bank is likely to see that if they did not accept the real estate short sale, they may end up having to foreclose on the home.

Homeowners in the middle of real estate short sale deals should not rest assured because not all real estate short sales are accepted by the lenders. Some real estate short sales are rejected because the buyers are not experienced enough to do them right. Some times, banks feel that the real estate short sale offers are too low and prefer to foreclose and sell the homes in auctions instead of accepting the real estate short sales.

Do you have jitters about putting your money towards real estate? After-all, the media LOVES to talk about what tumultuous times we’re in right now. Home prices falling! Buyers beware! Protect yourself!

Smart investors put a premium on complete and accurate information. Start questioning anybody’s credibility who claims that an investment is 100 percent secure or wise because whatever you do with your money certainly involves some form of threat. In this sense, it is advisable to KNOW what you must know in the business. Let us say your apprehension leads you to decide to do “nothing” with your money but instead keep it in the safety of your home. It still would not guarantee defense against other forms of destruction like fire, flood, even theft.

Here is another scenario: what if you opted to put your money in a bank safety deposit box? Would it be safer that way? Probably yes but only concerning its physical property. Remember that its buying power changes over time and that the bills you have are only worth the currency’s present value.

In the US, the annual rate of inflation is about 3 percent that translates to commodities increasing by almost 3 percent every year. In other words, your money is worth 3 percent less if it is being kept inside a safety box. Would you still perceive of it as “saving” when obviously your money’s purchasing power is gradually vanishing?

What about a savings account? These accounts are almost always protected by the FDIC (Federal Deposit Insurance Corporation) so there’s not much risk of your bank going under and you losing your money, but again you’re swimming upstream against the current of inflation. Even the best savings accounts out there barely give you enough interest to counteract inflation and often times inflation is outpacing your savings account interest earnings; but at least you’re not losing AS much!

Another remarkable area to look into is stocks. Would it be best to invest in something when there is no tangible item you can hold claim to? Investing in stocks can be compared to investing in an “idea” and whether you like it or not – the only thing you can claim yours is the fact that you put in funds so that the entity you place your money into will add value to itself, which eventually increase yours.

The danger here is that you wouldn’t surely know how much control you have over such an “idea”. In real sense, you actually have almost none. Most people remedy this by doing extensive research on the company or entity’s track record as well as the people around it (to predict if the “idea” will work for all of you). Unfortunately, it’s hard to tell especially if you are unaware of all the factors involved. Unless you have the desired technical preparation (i.e. its your profession, or you devote your time on research), investing in stocks would save you from much greater risk. This leads us now to the best possible option, the real estate.

Real estate is really a great field to invest in. Because it is “tangible” –real estate lends itself to seeing, touching, and improving. The risk involved is minimal as far as losing the investment is concerned. Suppose that you are faced with such a situation, insurance is there to protect you. That would be very unlikely if you opt for stocks! Another great news about real estate is that your property increases its value with inflation contrary to what happens in the case of paper currency where it loses its purchasing power over a period of time.

Another great thing about real estate is that money is made in multiple ways (these are too numerous to detail for the purpose of this article, but the benefits include huge tax breaks, gained equity through renter-paid debt reduction, equity gained through improvements, and appreciation). As stated in the beginning of the article, no investment is 100% safe, but it is my strong opinion that if done with some foresight, real estate is where you’ll find the most bang for your buck as well as the most security for your money.

Is flipping houses a legitimate business in the current economy? For the street smart real estate investors, flipping houses has become even more lucrative, even in the current market conditions.

However, for some, the dream to flip houses full time has become a real life scenario. And to these few, they understand that there’s more to flipping homes than just fixing up the property to resell. For those that are successful, there are three steps to making the business work for you.

1. Getting leads in your pipeline.

Be sure not to confuse leads with deals. Constantly promote your business to get more leads into your funnel. This is where it all starts for real estate investors that want to flip their way to wealth.

This involves marketing and constantly being on the lookout for potential properties. And without actively promoting and marketing your business, then you’re going to never get involved. You’re going to be left sitting on the sidelines while the people around you are profiting from red hot, smoking deals every month.

2. Converting the leads.

After you’ve began marketing your business, you’ll see leads began to come to you! And now, you’ll need to pre-qualify these leads to make sure it’s worth your time to pursue. Make sure the seller has motivation – in other words a real reason to sell, not just because they want to.

3. Time for the payoff.

This should be what you think of before ever presenting the offer. Although, this is the last piece of the puzzle, you should began the entire process with the end in mind – how you plan to get out of the deal and get paid?

You should consider the following when flipping your home:

a. You can sell it fast to another investor that will fix it up then resell to a homeowner.

b. Do you plan to flip the deal to a landlord/ investor that buys property for the long term?

c. Do you have any established relationship with any other investors that would be interested in the deal?

In order to succeed in this business, you’ve got to flip the home as fast as possible. Build solid relationships with other real estate investors in your own area because these investors are always looking for more deals.

Investor buyers don’t care if you make a profit as long as the deal is a win for them. Remember, you’ve got to negotiate a good enough deal so that you can leave some money on the table for your buyer. These three areas are the keys to your real estate income soaring.

If you have already heard the term reverse mortgage, it still sounds a little odd. If this is the first time you are hearing the term, it will probably sound like some kind of shady deal. Reverse mortgages are becoming more popular these days, but are they scams or are they legitimate?Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay YOU the mortgage payments? Let’s review what a reverse mortgage is so these questions can be answered.

The name is somewhat misleading. A reverse mortgage is a loan that is structured like a mortgage, with YOU as the lender and the BANK as the buyer. In the U.S., homeowners wanting to initiate a reverse mortgage must be at least 62 years old, and own all or most of their home. These backwards mortgages are usually performed through a bank or broker. The homeowner essentially sells his or her house to the bank, in return for receiving periodic mortgage payments. Sometimes the payments can be structured as a lump sum, line of credit, or a combination of the three methods.

So what are the benefits to a reverse mortgage? First it provides a constant and dependable stream of retirement income. Many retirement plans such as 401(K) or Individual Retirement Accounts (IRA) generally increase in value, but are still tied to stock market interest rates. The amount of money they provide during retirement can vary. Social Security, Medicare, and other U.S. government programs have endangered funding, so they may not be reliable sources of income. A reverse mortgage can supplement a senior citizen’s income. The amount depends on the homeowner’s age, equity of the house, interest rate on the loan, closing fees, and a few other factors.

A common misconception about the reverse mortgage is that the bank eventually owns your house. This is not true! The deed remains in your name throughout the entire term of the process. Note that there is interest on the loan payments, but it is deferred until the loan is repaid.

The homeowner can remain living in the house during the entire term of the reverse mortgage. The loan becomes due when the homeowner moves out, or becomes deceased. At those times, the survivors/heirs can repay the loan themselves if they want to keep the house. They can also sell the home and repay the loan plus the interest in full. The money paid to the homeowner as mortgage payments must be repaid to the lender when the loan becomes due.

These odd mortgages can provide much needed financial support during retirement. It is a time when medical costs are likely to increase, so an additional source of income can really help. Use a reverse mortgage to help yourself or your aging relatives to gain the financial security in retirement that they worked so hard to achieve.

Changes in the real estate market create new niches and investment strategies. One must be able to work well with the changes as this is one area of investing that is constantly changing and updating. If you are new at real estate investing, you should begin working with a mentor and complete some transactions with a partner to reduce your financial and liability risk. A mentor will help you to avoid the common mistakes made by many real estate investors. Begin to educate yourself; do some research on the internet, attend seminars and join a real estate investing association.

What should you look for in a real estate partner or mentor?

The first and most important issue is finding someone who you can work well with; someone who shares some of your interests and goals in succeeding in real estate investing. Your first real estate partnership should be worked with someone who will also be a good mentor; someone with years of active experience and one who is successful. Meet as many real estate investors as you can; talk to them about what they are doing and how it is working for them. Many experienced investors are looking for partners; some are looking for new people to mentor.

Take your time and find a partner or mentor who is open and honest; one you can trust to steer you in the right direction. Finding real estate investors to work with is the easy part. Once you get started, you will find that there are a lot of people you need to know, including investors, brokers, property managers, rehab contractors, title companies, mortgage lenders, insurance providers and anyone who services real estate investors. A successful investor has all the necessary connections.

A good real estate partner to work with is one who has had experience at handling a variety of transactions in our constantly changing market. He will have several different exit strategies he likes to use and he will know which one works best for each transaction. He should be able to show you some examples of deals he’s made in the past that show profit. A good real estate partner is one who has a wealth of experience; a good mentor is one who will share their knowledge with you.

What do you want from the real estate partnership?

Find a good mentor and discuss the possibility of a partnership. Be sure to discuss issues like your degree of involvement in management, the amount of your investment and your responsibilities. Are you looking for a partnership where you simply invest money and the partner does the work? Are you looking at commercial, residential, vacation resorts or any certain type of property to invest in? Do you want to hold property for cash flow or is wholesaling your preference? Maybe there is a new niche in the market that you are interested in.

You are no-doubt thinking about financial gain; you must make a good profit form the partnership, no matter what type of transactions you’re working or what your degree of involvement is. Does the anticipated profit match the degree of risk in the deal? How safe is the investment?

Liability exposure is something to be considered in the real estate investing world. Will the partnership be set up as a corporation or limited liability company? Will your personal assets be protected should something go wrong? Be sure to address these issues with your partner.

The ideal person to work with as a real estate mentor is one who will explain all the important issues so that you have a clear understanding. You should be comfortable with your financial investment, personal responsibility and the amount of profit made from the deal.

Considering the condition of the real estate market today, a lot of people feel they should think twice about investing. The experienced real estate investor is seeing things quite differently. With a high supply of homes and few buyers, the prices of real estate are very low. This is a buyers’ market and it is a great time to invest in real estate.

Join a real estate investors association or a landlords’ club. Attend seminars and meetings; surround yourself with other people in the real estate investing field, discover who is successful and begin to model your program after them. Develop a relationship with someone who will make a great real estate partner and mentor and you will be off to a great start in real estate investing.

If you had been watching the real estate foreclosure investing market closely during the massive housing boom of 2000-2005, you could have seen the current foreclosure crisis coming; and with it, the many foreclosure investment opportunities which have proliferated nationwide.

The number of defaults and indeed, foreclosures have been on the rise as sub-prime lenders have been going out of business. However, there is a lot more foreclosure investors out there than you may think.

Will You Be Able To Capitalize On This Foreclosure Boom? On the surface it seems easy enough. Get a list of properties in default. Contact homeowners. And get the deal done at a juicy discount, before the bank takes the house. Then you can fix it up and flip it, or keep it as a rental with an instant built-in equity profit. Right? Well, not quite.

You may be able to make a lot of money in foreclosure investing; enough to support yourself and your family, even pay for luxuries. However, foreclosure investments could also turn into a money pit which could take up all of your time and your money.

In fact, there are only a relatively small number of investors who have managed to make their foreclosure investing profitable on a consistent basis. Many investors make the mistake of not trying hard enough to set themselves apart from others in this very competitive market.

How Will You Differentiate Yourself in a Crowded Foreclosure Investing Field? To say it’s crowded is a huge understatement. The field of foreclosures is probably the most competitive area of real estate investing. It routinely gets more attention from mass media. So more people flock to pursue it. Hundreds of investors in your metro area are mailing to homeowners facing foreclosure. They’re even harassing homeowners on the phone and knocking on doors.

In short, if a homeowner is behind on payments, you can be prepared for a major fight for his attention. Just imagine for a moment that person sitting at his kitchen table plowing through a pile of letters from lawyers, bill collectors and investors. Your mailing piece is just one of many that goes straight to the garbage can. You must find a way to differentiate yourself from the investment crowds. Here’s an idea that will put you ahead of the competition.

Take An Ethical Approach To Help Homeowners Facing Foreclosure. Most people who are in danger of losing their home are not that interested in talking to a property investor about selling their home. More than likely, they perceive these investors as vultures preying on the misfortune of others.

The way to get these homeowners to contact you is to offer them something none of the other investors are, the opportunity to remain in their homes.

Three-Step Highly Profitable Foreclosure Investing Strategy That Stars With An Offer To Keep Homeowners Facing Foreclosure In Their Home. First, trying to help a family in financial trouble is the ethical thing to do. You’ll be preserving the American Dream.

Yet another reason is, you’ll actually make money doing it. You can help them negotiate a repayment plan with their current lender (the process is called loss mitigation) and collect a fee for your service. There’re several companies nationwide with an in-house list of Loss Mitigation department contacts for literally every lender in the country that will do all the work for you. So, even if you never buy a single home, with tens of thousands of foreclosures in your hometown, offering loss mitigation services could turn into a lucrative income stream by itself.

Lastly, this is the most profitable foreclosure investing approach. In many cases you will end up buying the home. Remember, the loss mitigation process will only work for those owners who got behind, but now recovered their ability to pay. Most won’t qualify for a repayment plan because they can’t prove their hardship is behind them. And they won’t know it until you, the foreclosure investor, helped them to pencil their income and expenses on paper and submit it to their lender. Now they have undeniable proof they can’t keep it and youre right back to your original foreclosure investing game plan. Once the reality settles in, they’ll start talking sale. Who will they sell to? You, of course, the foreclosure investing pro. You have now earned their trust and it’s the only next natural step to take.

One of the most powerful weapons of real estate investment is taking over payments of existing financing to purchase homes.

How many loans are really out there that you can take over payments on? Recently the American Bankers Association reported that in a single year there were close to one trillion dollars of new mortgages created from refinancing existing loans. Most of these loans were made at low 6%-8% fixed interest rates.

Taking over payments deals with these present mortgages that were obtained by someone else and buying the very property on which the loan was lent out. It actually makes sense to invest in such real estate because a huge amount of money is caught up in this net!

If you’re still wondering why you should be taking over payments on houses as opposed to getting new investor loans, here’re several things to consider. Compared to homeowners, real estate investors are penalized by mortgage lenders in variety of ways. For starters, investors have to pay higher interest rates on loans for investment properties than homeowners do.

If you can take over existing payments you’ll be paying a lower interest rate than other investors who get traditional investor loans. This is great for your rental cash flow because it means your expenses related to loan payments are going to be lower. If you later decide to resell the property with owner financing and keep the existing loan in place, you’ll get a better spread on the interest and payments you pay versus ones you collect from your purchaser. This will again increase your monthly cash flow.

Taking over payments has another valuable benefit. Remember, the bulk of your monthly loan payments will go toward interest, while only a small portion of each payment will apply toward a principal reduction. With lower interest financing on the existing loan you’re taking over – you’ll pay less interest and overall for the property.

But that’s just the beginning. If you’re getting an investment property loan you’ll be required to come up with a lot larger down payment amount than a home owner has to. You’ll need to have at least 20% down while home owners often get away with as little as 3%-5% out of pocket.

Moreover, real estate investors have to show at least 6 months worth of payments in cash reserves while a homeowner can get away with just 2 months in reserves. If you’re taking over payments on a homeowner’s existing loan, you’ll no longer have to come up with a large 20% down payment. This, in turn, means with the same amount of capital you can buy a larger number of properties.

But we’re still not quite done yet. When you take over payments on an existing loan you benefit from all the loan payments previously made by the owner. Remember, the owner has originated the loan 2, 5 or even 10 years before you came along wanting to take over payments. The more payment the owner made on the loan you’re taking over, the fewer months and years are left to pay on the loan until it is completely paid in full. So, taking over payments on existing loan speeds up the process and allows you to pay-off the loan balance and build up your equity a lot quicker.

Lastly, you must remember that this taking over process spares you from the dreary process of qualifying for mortgage loan. The required paperwork has been duly done by the person you are buying the house from. Since he was qualified enough to obtain the loan, you could bask in this benefit!

If you haven’t tried taking over payments you’re missing out on what may be the easiest, cheapest and profitable way to fund your real estate investment purchases.

You want to invest in real estate. What’s the best way to use your money? The use of leverage and OPM (other people’s money) is what makes real estate such a powerful investment tool. Different people have distinct viewpoints regarding how much leverage and OPM is good.

Many who engage in this business have distinct goals, so you must always keep in mind that your team of experts needs a well-trained mortgage professional. For one, the examples below may or may not address your ultimate concern. People’s aim may vary from receiving monthly cash flows as additional incomes to preferring investment appreciation in some others.

To vitalize your financial goal, look closely into your options. What’s amazing in the real estate market is the assurance that you are in control. For instance, you have $20,000 to start with. With this amount, you can have either a 10 percent down payment on a $20,000 worth of property or a 20 percent down payment on a $10,000 property. Of course, you will be the one to decide which is better.

Maybe you want to ask: what is the difference between these two options? Considering you decided to put in a larger down payment, chances are, you will pay your mortgage at a much lower price and you do not need mortgage insurance at the 20 percent mark. Larger down payments can provide you cashflow if that is what you like.

Assuming that for the $100,000 and $200,000 properties, the appreciation is set at 6 percent (Please note that the appreciation rate actually varies depending on their locations, type of property, etc..but for this article, you can well disregard these differences). That translates to these figures: the $100,000 will be worth $106,000 after a year of appreciation and the $200,000 becomes $212,000.

You will have made double the amount of appreciation with the 10% down payment on $200K option, but you didn’t have to spend one penny more! This effect will compound year after year and after awhile the difference will staggering.

In a relatively shorter time, your gain will be sufficient to obtain equity and purchase another PROPERTY so you actually have doubled your properties and compounded their appreciation. On another hand, the cashflow might not be present in the $200,000 property and perhaps there will be times when you have to expend for maintenance costs but look at the greater appreciation and long-term benefits.

Moreover, you get more advantage since debt payments and maintenance costs are tax deductions (using leverage or OPM and getting less monthly cashflow) unlike cashflow that is taxable. In the case of some people who needed monthly cashflow – the solution is simple, your approach can be modified to get what you really wanted. Besides, most people would agree that extra payment every month realizes wealth building benefits in the future!

Your choice to effectively use your money is important. Start now by building your team of experts and hit your mark!

Let’s say you are interested in getting started wholesaling properties but not sure what the state laws are concerning this kind of real estate transactions and you don’t want to break any laws unknowingly.

Although every state is different, I assure you that wholesaling is legal everywhere. This is just business like any other and the free market system – buying low and selling high – nothing illegal about that.

Also if you are not a realtor, you don’t have to worry about many things because you are not considered a professional. Even though some realtors don’t know Jack: I have some friends who have taken Realtor test – in several different sates – and passed without studying. In most states you only have to score a 70 to pass the exam and get your license. When I was in school that was a D grade. So much for them being professional.

Anyway, here is my philosophy about the legal aspect. Do what is right and be brutally honest in everything you do – and you have nothing to worry about. If you are still concerned about the legality, talk to a real estate closing attorney (or a real estate specific attorney) and they can direct you.

Again, the only people that are or should be worried about legalities are people who are trying to cheat people, in my opinion. As long as the purchase is an “As Is” purchase, you are fine. A buyer will not be able to come back on you. Don’t be dishonest about anything and don’t try to trick anybody in any kind of way. So do right, tell the truth, and you should have nothing to worry about.

Unfortunately, most of the time you cannot use assignments on foreclosures. In case of REOs, most banks will have it in their contract that it is not assignable.

I had the same problem on a foreclosure I put under contract. The buyer wanted me to assign the contract to him and I nearly lost the deal. Eventually he decided to go ahead and buy the property from me even though I could not assign it to him and let him close on my contract.

I actually have done a few assignments on foreclosures, so it is not completely impossible – but very unlikely. Just ask, and every now and then you will deal with a bank rep who doesn’t care, but Extremely Rarely! I would go ahead thinking that you will not be able to assign the contract.

One way to go when buying REO’s is to put REO’s under contract in an LLC then sell the LLC to an end buyer to avoid the non-assignment clause. It takes a little work but it can be an excellent strategy.

Another way to go if assigning the contract is out of the question is to find an attorney that will do a double closing. You can also have a hard money lender set up so that you would be able to fund the deal for the flip. I do this all the time now. I have a lot of guys who will lend me hard money, even though I hate paying the price for borrowing. Sometimes it is a grand just to borrow the money for an hour, but if I can pay 1k to make 5-10k or higher I will do that all day long.

When you are sure the house will sell fast, do what I do and put your earnest money down. Get thirty days to close (I have never had a problem with that except in rare cases where they offered me a super deal if I would close sooner) and start marketing it. The bottom line is if you think you have buyers for the property, don’t let anything stop you from making an offer.

In my area one will find quite a few investors who make a lot of money, but if you ask them what their secret is to finding their properties they will tell you that they don’t know how.

What these investors will tell you is they let the local wholesaler find them. There are several investors in my area that buy from me (I am the wholesaler) over and over again. Sometimes I think I am missing out when I hear about all the money they are making on the deals that I sell them; but that is just the way it is.

These successful investors decided that I didn’t feel comfortable selling properties to home owners, and they figured out that I had no desire to make a huge profit on a deal. I just wanted to make a few thousand and do that a bunch of times every month.

Most of these investors realized that I had to move properties fast so I could make a living. Unlike them, buying and selling houses is my full time job. They already have jobs, so they would not find the time to look for the deals that I brought to them.

In short, if you want to make a lot of money in real estate yet you don’t have the time to find the deals, buy from the guy who is selling 5-10 properties a month and doing volume business. If you don’t, you will soon find out that the most you will save is a few thousand bucks, and the time it will take you to do so will not be worth it.

If someone dropped me in a new town and told me to buy a good real estate deal in less than 3 hours, here is what I would do.

Unlike all the big experts who will tell you to do a lot of marketing and make lots of offers on houses, if I wanted to find a deal fast the first thing I would do is find the local wholesaler.

Not just any wholesaler, because in a large market there will probably be more than a few and that is where you want to invest. What you should look for is the Big dog wholesaler, the one who is moving more properties than anyone else. Look for somebody who is purchasing and selling 5 to 10 properties per month. That would be a true wholesaler.

A true wholesaler marks up a deal a few thousand and goes to the next deal, nothing like many courses and real estate gurus talking of making 10, 20 or even 50k on a deal. These are not true wholesalers, they are flippers.

Flippers make home runs. They find a property and mark it up a bunch and make a killing one deal. These will be the guys that do one or two deals a month.

The true wholesalers will only make a little on each deal and therefore will have investors buying from them over and over again because they know they are getting the best deals.

In short, devoting a lot of time and money trying to learn how to find real estate deals in my opinion is a waste of time. I am one of the big dog wholesalers in my area and, after thinking about how I do business, I realized that before I became a wholesaler I wasted lots of time and money learning how to find deals. It does pay off if you want to be a wholesaler but if you are just trying to flip a deal or build a rental portfolio it really does not make sense trying to find better deals than me because you will not be able to do it.

If you want to find great deals super fast then use the local wholesaler. It is like having a buyer on your staff that is doing all the legwork for you. The time and money that is saved by using their expertise is more than worth the mark up you will pay.

Where do you go to buy something at lower a price? Wal-Mart, Target, all of the similar stores are large wholesalers. They buy in bulk and then pass the savings on to the consumer. In your real estate investing the local wholesaler does the same for you.

When I was starting out without any money, this is what I did.

Well, if you don’t know anything about wholesaling real estate and have no money to invest, you will need to have a job and get to work to make some cash so you can live, and then work to build into full time real estate.

What I would recommend is to find your real estate clubs and start networking, talking to real estate investors in your area. Be very bold and tell people you are new and eager to learn. Ask each investor you meet: “Is there any way we can do some business together real fast?” Most of them will say yes. Then push the conversation and find out how you can help the investor either buy or sell properties and make a little money.

The key when you first start is to concentrate on the learning process, not on doing your first deal; and the only way to learn is to “jump in amongst it”. If you will ask this question to every investor you meet, sooner or later you are going to find someone whom you will be able to help and to learn from.

Once you start, you will soon find a way to flip your first deal. Either you will meet sellers or you will meet buyers through connections that you make. It is very easy – and cost nothing but time.

This way I met a lot of my mentors in the business. As I was doing that I was developing the skills necessary to get into the business full time.

If you looked for an investment club in your area and could not find one, I have to say I don’t think you were looking hard enough.

Recently somebody told me that they couldn’t find any investment clubs in Charleston, South Carolina. So I ran a search on Google and got several results. On the list of contacts there were two clubs in Charleston, some links to Web sites with several phone numbers. If I tried to call so many numbers, I would certainly find someone who would point me the right direction.

By the way, I went to high school in Dillon, SC, so I know about Charleston. I will bet you any amount of money that there is an investment club or association there; in the city the size of Charleston there is inevitably at least one.

Always start with using Internet; you will find out that a problem you are facing is simple. What if you are not comfortable around computers? Learn how to use one, especially the Internet; not doing it nowadays is quite a disadvantage. What you really need is to get enthusiastic and more determined to find the answers you need.

What helped me develop the attitude of determination, was telling myself that finding the answers and achieving my goals was the matter of life and death. When you can learn to imagine yourself in this kind of situation, you will be able to do anything. It is hard to imagine, of course, that someone is holding a gun to your head and gave you a time limit to come up with a solution of a problem. But look at the mental side of things – don’t you think that this method of self-motivation could be quite effective?

My advice to you is – be proactive! Start with the Web, get any related information, write down all available numbers and call them. Even if you don’t find exactly what you are looking for, you would still make useful contacts in the area and eventually find what you were looking for.

The real estate market has dropped out. Prices are falling around your ears. So does this mean that you should get out of property investing? No this is actually a great opportunity to increase your portfolio. When you are buy real estate it does not really matter where the market is, unless you are considering selling in the short term. If you are holding long term then you have to accept the market fluctuations if you can buy during a low period of a cycle that is the “golden hour” in real estate…but sometimes it is hard to find that hour on your watch.

Now that the market is experiencing a downturn it is a great time to be buying. Just look at the foreclosure lists. You have a massive inventory to choose from and most are at below market value. Go for positive cash flow whenever you can. In other words make sure your rental income equals or exceeds your outgoing including mortgage repayments. If you have other income you may be able to stand an extra $100 or more per month to top off the mortgage but try to avoid it.

When real estate prices where climbing we all knew that our property values also climbed. Now in a declining market and slower home sales, investors need to be able to hold those property investments for a longer period of time.

Meanwhile, concentrate on positive gearing and steadily increasing returns. This is a long term game and always has been. Look at property investing from a business perspective and do the sums before you buy. You need a decent return on investment and you need the rental return to cover or nearly cover the mortgage expenditure.

Taking the current market woes in to consideration, the fact that now is a great time to buy and hold for the long term, goes without saying. Due diligence is the key for the next few years. Now is the time to look at buying for long term gains.