4 Steps to Real Estate Investing Success!

4 Steps To Real Estate Investing Success!

Real estate investing is often great not to mention sometimes it's red hot. When it's hot dozens of real estate seminars/webnars will begin rolling across the country and thousands of people will end up spending thousands of dollars on real estate investing education.

It's surprising to find that of all those thousands of enthusiastic people who attend such seminars only about 5% buy even one investment property. Why? The real estate gurus sell the "sizzle" and make cashing in on real estate sound easy. The truth is that it's simple, but not easy.

Here's a quick plan which will allow anyone to start building financial independence.

There are essentially four steps to investing in single family homes:

1. Buy homes below full market value. Yes, people really do sell homes for less than the home's full value. The secret is to grasp that the majority home owners is only going to consider a purchase offer that is all cash and about 5% to 10% of their asking price.

The successful real estate investor learns to locate financially distressed home owners who have no choice but to sell for less than market value. they've lost their job or been abruptly transferred; they are divorcing; they been living beyond their income; the family has been overwhelmed with medical bills and, not uncommonly in the world today, their money has vanished to support a drug habit.

Those are examples of motivated sellers. They have to sell and they will settle for something other than a conventional, all cash offer.

2. How will you find motivated sellers? You work at it! Like every business it is important to develop a little marketing plan. one which is easy, yet very efficient, is the one which was established 75 years ago by the Fuller Brush company; door to door sales.

You are selling your skill as a home buyer to people who must sell. Your are there because they need you and you have the skill to aid them resolve at the very least part of their problem. Using door to door prospecting you will learn more and buy more homes faster than almost every other technique.

However, the majority just will not walk door to door for 3 or four hours each week. OK, you can find other ways.

You could view public notices for the announcement of foreclosure sales. Meeting with a home owner right after they've received a notice that they are about to lose their home allows you to control an extremely motivated seller. Other public notices that provide buying opportunities include probate, divorce and bankruptcy. You can follow the Homes For Sale listings in your local newspaper or Internet site.

You can telephone the names found in these notices or, and this is the least time consuming, send a postcard expressing your interest in buying their property. It will generate buying possibilities, just not as many as personal contact.

3. After you've found a motivated seller you will need to understand how to frame offers that provide benefits for both you and for the home owner. An excellent real estate investor rapidly learns that this isn't a business of stealing homes, but of solving problems in a way that benefits the seller.

The home owner is in a very difficult position of some sort and you can save them from public embarrassment and, generally, give them at least a little cash to get a new start.

No real estate investor can afford to leave cash in every deal. No one but Warren Buffet has that much available money. You must use creative techniques like, leases, option and taking over mortgage payments. Little or no cash is needed for those deals. You can discover plenty of reasonable priced educational material on those subjects in book stores or on Ebay and Amazon. The same education that seminars sell for thousands of dollars.

4. You create your profit when you buy!.. Never buy a home or investment property until you've carefully determined exactly how you will get to your profit. Should you hold it as a long term investment will the monthly rental income more than cover the monthly mortgage payment? Are you going to sell the deal to another investor for fast cash? Do you want to do some fix-up and sell the house for full value? Will you quickly trade it to get a more desirable home? Have a very good plan before you buy a home.

There you have 4 steps that even a part-time real estate investor can implement in three to four hours per week. What's the missing component? Your dedication and perseverance. If you will unfailingly follow the plan for a few months you will be well on your way to financial independence.