How to Invest in Real Estate With Little or No Money Down

Terms of Use......Page 5
Want to learn more?......Page 6
Contents......Page 7
  1 Acquiring Real Estate Wealth......Page 11
“The Only Investment That Always Goes Up . . . Not!”......Page 13
How Money Is Really Made in Real Estate......Page 15
The Other Reality of Real Estate Investing......Page 20
In for the Long Haul......Page 24
What Should You Invest In?......Page 27
Building the Road Map......Page 30
Does It Really Work That Way?......Page 31
The Bottom Line......Page 32
Lender’s Resistance......Page 33
How Do I Get a No-Down Mortgage When I Buy?......Page 34
The Importance of Being Earnest......Page 35
Becoming a Home Owner/Investor......Page 36
The Fine Art of Sequential Investing......Page 37
What If I’m Not a Young Investor?......Page 39
How Do You Take Your Profits?......Page 40
Are There Any Drawbacks?......Page 42
Where Do I Find a Lender?......Page 43
Be Careful to Get the Right Pre-Approval......Page 44
The Bottom Line......Page 45
  4 Get Others to Lend You the Money to Buy......Page 47
When the Seller Owns the Home Free and Clear......Page 48
When the Seller Owes Money on the Property......Page 49
How Do I Make a “Seller Financing” Offer?......Page 51
What Are Other Types of Financing?......Page 52
Land Contract of Sale—A Legal Alternative?......Page 56
Other Types of Little–to-No-Cash Financing......Page 57
  5 The Big Surprise—Transaction Costs......Page 59
Buy and Sell on Your Own......Page 60
Should You Get a Real Estate License?......Page 61
Getting the Other Party to Pay......Page 62
Cutting Title Insurance and Escrow Costs......Page 68
  6 The Big Trap—Negative Cash Flow......Page 71
The Link between Alligators and Little-to-No-Cash Investors......Page 72
Calculate Your Cash Flow before You Buy......Page 73
Do the Long-Term Profits Warrant the Short-Term Cost?......Page 76
The 1 Percent Rule......Page 77
Cutting Expenses to Reduce Negative Cash Flow......Page 79
Don’t Overlook Those Tax Savings......Page 81
Get Good Tax Advice......Page 82
What about High-Priced Areas?......Page 83
Finding a Good Rental Area......Page 86
Avoid Older Homes......Page 88
Avoid Big Lots......Page 89
Be Careful with Condos and Co-Ops......Page 90
Is the Property Ready to Be Rented?......Page 91
What about the Neighborhood?......Page 92
What’s the Local Economy Like?......Page 93
The Bottom Line......Page 94
  8 Flip Quickly or Hold Long Term?......Page 95
Getting Started......Page 96
The Mechanics of Flipping a Property......Page 97
Trying to Limit Your Liability......Page 103
Making Full Disclosure......Page 104
False Appraisals—the Bane of Flipping......Page 106
The Bottom Line......Page 107
Begin at the Beginning......Page 109
What to Look for in the Listings......Page 110
What about Getting a License and Avoiding the Real Estate Agent Altogether?......Page 112
Do the Legwork Yourself on “By Owner” Properties......Page 113
Check Out Bank-Owned Properties......Page 114
Consider Foreclosures......Page 117
Buying When the Owner Is in Default......Page 118
Buying at the Foreclosure Sale......Page 119
HUD-Owned Properties......Page 120
VA-Owned Properties......Page 121
Secondary Lenders’ Properties......Page 122
Other Government Repo Programs......Page 123
10 The Keys to Being a Successful Landlord......Page 125
Key #1—Remember, Business Is Business......Page 126
Key #2—Offer a Clean Rental......Page 127
Key #3—Take Care of the Water Bill......Page 128
Key #4—Know Whom You’re Renting To......Page 129
Key #5—Don’t Try to Avoid Children or Pets......Page 132
Key #6—Don’t Always Try to Get the Last Month’s Rent......Page 133
Key #7—Rent for Less......Page 135
Key #8—Charge for Late Rent......Page 136
Key #9—Don’t Delay in Fixing a Problem......Page 137
Key #10—Keep an Eye on Your Property......Page 138
Key #11—Don’t Let the Tenant Get Behind......Page 139
Key #12—Evict Only as a Last Resort......Page 140
The Bottom Line......Page 141
11 Tricks of the Purchase Agreement......Page 143
How Much Money Should I Risk?......Page 144
What If the Deal Doesn’t Go Through?......Page 145
Should You Give the Deposit to the Seller?......Page 146
What If It’s No One’s Fault?......Page 148
Can I Protect Myself with a “Liquidated Damages” Clause?......Page 149
Escape Clauses......Page 150
Take Charge of Time......Page 152
Can I Get Out of the Deal on the Final Walk-Through?......Page 153
Should an Investor Insist on a Home Protection Plan?......Page 154
Should I Agree to an Arbitration Clause?......Page 155
Be Wary of Overly Zealous Attorneys......Page 156
What If I Make a Profit?......Page 157
What about Trading?......Page 159
Can I Combine an Exchange and a Personal Property Exclusion?......Page 160
Understanding Depreciation......Page 161
Mind Your Tax Basis......Page 164
Your Gross Adjusted Income Must Not Exceed $150,000......Page 166
You Must Actively Participate in the Rental Process......Page 167
Keep All Your Receipts......Page 168
Beware of Becoming a Dealer in Real Estate......Page 169
Conclusion Working for Yourself......Page 171
Get Started Early......Page 172
Getting Money out of Your Real Estate......Page 173
Keeping a Business Perspective......Page 174
Get Started Now!......Page 175
Why Should a Lender Offer You a Loan?......Page 177
Can I Improve My Credit Rating?......Page 182
Stating Your Income......Page 184
Too Many or Too Few Credit Cards?......Page 186
What If Your Bad Credit Is the Result of Mistakes?......Page 187
Pay First, Argue Later?......Page 188
Credit Bureaus Do Make Mistakes......Page 189
It’s Not My Fault......Page 190
When You’re Just Getting Started......Page 192
Establishing a Credit History......Page 193
Get a Cosigner......Page 194
Appendix 2 Selling Short......Page 197
Contact Your Lender......Page 198
Hang on for Dear Life......Page 199
Purchase Money Mortgages......Page 201
Deed in Lieu......Page 202
Appendix 3 Little to No Cash Down Federal Loan Programs......Page 203
Ninety-Five Percent Mortgages—Freddie Mac......Page 204
Ninety-Seven Percent Mortgages—Freddie Mac......Page 206
For Credit-Challenged Borrowers—Freddie Mac......Page 207
One Hundred Percent Mortgage—Freddie Mac......Page 209
Fixed-Rate Mortgage—Fannie Mae......Page 211
Adjustable Rate Mortgages—Fannie Mae......Page 213
Appendix 4 Mortgage Priority in Foreclosure......Page 215
Index......Page 217
About the Author......Page 226