Why investing in hud home ?
I get asked all the time by new real estate investors if investing in hud homes is a good strategy. I will be recap in this article what I tell themÖ. The increased demand drives up the price and new investors tend to get any and will buy based on emotion instead of logic because they ďjust want to get their first dealĒ. If you pay too much for a property, you will lose your shirt on the deal. Thatís why it important to not overpay for the property because you make your money on a property on the day you buy, not the day you sell. This is why itís important to have the right real estate investing training so you know how to spot the good deals from the bad and not overpay for a property.
Your first deal can bankrupt if you donít structure it the right way. I see this all the time in my real estate investment club. The guys that donít take the time to invest in their education are soon out of business because they try and figure it out on their own and fail. Short Sales are a great way to guarantee that you wonít overpay for properties. If you are wondering ďwhat is a short sale ďor are wondering what the ďdefinition of a short sale isďhere you go.
A Short Sale is when the lender accepts less than what is owed on a mortgage on home foreclosures. All of The deals are no money down. We donít give the sellers any money when we get the deed to their house. The only thing you have to pay when you get a deal is the cost of the notary and recording fee when you record your deed. Thatís a maximum of $100. Now my acquisitions manager is a notary so I donít pay any notary fees. If you donít put any money down on the house, you arenít putting any money at risk. You donít need good credit to do short sale deals. You donít need to go get a mortgage when you do short sales deals. If you donít need to use your credit, you arenít putting your credit at risk.
You fund the deal the way you structure the transaction. You fund the deal by either: The ability to own houses without having to make monthly mortgage payments. There are no monthly payments to make for short sale deals. The houses are either in foreclosure or about to be in foreclosure. You donít need to make any payments therefore you arenít putting any money at risking making monthly payments. Preforeclosures and Short Sales are extremely easy to find right now. There arenít enough investors out there to handle all of the deals in the market. Thatís why Iím on a mission to equip you with all of the resources you need so you can go out there and help all of these struggling homeowners and make a lot of money while doing it. You may here some real estate speakers say to stay away from foreclosures because there is too much competition. Well that was then and this is now.
They are teaching old information because they are not currently practicing what they preach. I am actively buying and selling foreclosures in my own backyard and I know what works and what doesnít work. And I have to tell you there is no competition for preforeclosure and short sales now because there are so many of them. Short Sales are easy to get because it doesnít require you to do a lot of negotiating with the seller because they know they donít have any equity and theyíre just looking for a way out. You are their solution! I love working with short sale sellers because they are the most motivated sellers out there. Short Sales are the most profitable quick turn deals to do in residential real estate because youíre making all of your profit on the discount with the lender One of the biggest benefits of the short sale business is that it works even better on Luxury Homes. The banks are more flexible and more negotiable on larger mortgages. Banks donít want to take houses back and they definitely donít want to take back Luxury homes. It takes the same amount of work to do a deal on a luxury home than it does to do a starter home. The difference is A Luxury home pays 10 times as much profit.
Its like doing 10 deals in one and when you combine the short sale strategy with luxury homes, youíve got the golden ticket. You See, Banks are in the money business. Theyíre not in the Real Estate business. They donít want to own any properties. Their only interest is making interest on their money. Foreclosing on homes is a hassle they have to deal with because itís a cost of doing business for them. The sooner you understand this the sooner you will realize how huge this opportunity is for you right now. When banks lend out money Ė they have to keep a multiple of 5 times the amount of money they lend out in reserves. When a loan goes bad, itís now considered a non-performing asset and that limits the amount of money they can lend out.
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