http://www.articletrader.com/ Articles at ArticleTrader en-us http://www.articletrader.com/finance/real-estate/put-seller-financing-to-work-for-you.html http://www.articletrader.com/finance/real-estate/put-seller-financing-to-work-for-you.html Wed, 19 Dec 2007 00:00:00 -0600
More and more sellers are offering financing because the rate of return they can get is better than through income-producing investments like certificates of deposit, money market accounts, or other “safe” investment vehicles. It’s easy to understand: a seller will be much happier receiving 7 percent interest on the mortgage he offers you than receiving 2 or 3 percent from a money market account.

For buyers, seller financing can be a cheaper alternative. You won’t pay loan fees, or PMI premiums, and in many cases the credit checks and underwriting requirements are much lower. (Some sellers won’t even check your credit.) In general the closing costs involved in seller financing are much lower than with traditional financing.

Why would the seller be willing to finance your purchase of their property? There are a number of possible advantages. The seller may be willing to offer financing if:

* The property type is difficult to finance through traditional third party lenders.
* The property has been on the market for 90 or more days.
* An “as-is” closing is desired on a property in need of repairs.
* The owner has not met minimum holding time or title seasoning requirements required by traditional lenders.
* An immediate closing required due to imminent foreclosure or other financial burdens.
* A quick closing is preferred by seller to free up investment capital.
* The seller wants long-term interest income.

The last situation listed is especially common. Here’s why: let’s say you’ve owned a rental property for a number of years and have paid off the mortgage. You enjoy the monthly income you receive from rental payments, but you’re not interested in being a landlord any more. By selling the property and offering owner financing, you still get monthly income – but you avoid all the duties of being a landlord, since that’s now the new owner’s role. In addition, you’ve avoided any capital gains taxes that might be due if you sold the property outright.

Here’s why seller financing can be advantageous to you as the buyer:

* You can often put little or no money down. Some sellers will require ten, twenty, or thirty percent down, but many will accept less than ten percent, especially if their goal is to receive monthly income from the property in the form of mortgage payments.
* You’ll face lower credit requirements. As I mentioned earlier, some sellers won’t check your credit at all. Most will simply make sure you’ve had no bankruptcies or foreclosures in your past.
* Sellers won’t require you to have an underlying (qualifying) income. If it’s an investment property you’re buying, a traditional lender will expect you to have sufficient income to cover at least some of the monthly payments on the property in case your units are vacant for a period of time. Sellers assume your income will be derived from rent payments. As long as the rent you will receive covers the monthly payments, the typical seller won’t ask about your monthly income from other sources.
* The terms can be more flexible. You and the seller agree on terms – you can decide on any terms you’re comfortable with. Price, interest rate, terms, and any other loan requirements are all up for negotiation. If you have unusual needs, you and the seller may be able to reach an agreement that a traditional lender won’t. For instance, let’s say you work on commission, and at year-end you always receive a lump-sum payout. If the seller agrees, you could make lower monthly payments for eleven months of the year, and a larger payment on the twelfth month.
* Closing costs are lower. Sellers don’t usually ask for points, loan application fees, origination fees, etc. The seller isn’t covering advertising costs, overhead, or other costs that a lending institution has to cover.
* You’ll complete less paperwork. Sellers don’t answer to a bureaucracy, so the only paperwork you’ll complete is what’s absolutely necessary for the transaction to be legal in your locality.
* The sale can take place much more quickly. I’ve known people who have been able to close on a property within a week of signing a contract.

Some sellers will ask for a balloon note – they want monthly payments for a certain number of years, and after that they’d like to cash out. Situations like that are common when the owner is nearing retirement age. If the owners are in their early 60s, for instance, they’re probably not concerned about receiving mortgage payments for the next 30 years… five or ten years may be long enough.

When the balloon payment is due, you’ll simply get traditional financing (or use another creative financing method.) If your goal is to refurbish the property and re-sell it, make sure you negotiate for enough time before the balloon note becomes due for you to complete your repairs and sell the property.

Keep in mind that the loan agreement you reach can have “unusual” requirements. It’s not uncommon to buy a property using owner financing and find a clause in the contract stipulating you can not sell the property for at least five years – the owner wants to be sure he receives mortgage payments for at least five years before receiving the balance of the principal. Make sure you’re comfortable with whatever agreements you reach.

There’s a major advantage to using seller financing if you’re trying to accumulate properties: if you’ve bought a property financed by the seller, the transaction will not show up on your credit report. That can be an advantage if you’re trying to buy multiple properties, or if your credit is marginal to begin with. Properties purchased through seller financing are “transparent” to lending institutions.

When you’re looking for flipping properties, some will be advertised as “owner financing available” or “seller financing available.” In many cases, the seller may be willing to offer financing but isn’t advertising that fact. If you find a property you want to buy, you can always make seller financing a contingency of your offer.

Like most things – you won’t know until you ask. If the seller isn’t interested in carrying financing, that’s okay… because he or she doesn’t have to agree.

If the sellers weren’t originally offering financing, they’re unlikely to entertain the idea unless you put the request in writing as a part of your offer to buy the property. Think about it: if you’re selling a property, and a person casually asks if you’re interested in financing it, you’re likely to say no. If their request comes with an attractive offer on the property, and you haven’t had many offers… you may be more willing to at least look at the possibility.


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Mark Sumpter is the founder of The Wealth College Inc, which develops comprehensive, systematic approaches to securing financial freedom through real estate investment. Mark offers a FREE audio CD on “Building Wealth Through Real Estate” by logging onto www.therealestateinvestortoday.com. He also offers a series of 52 “Short Sale and Pre-foreclosure Tips That Will Make Your Pockets FAT!” absolutely FREE-of-charge by logging on www.shortsaleexpert.net

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/real-estate/lease-options-a-different-way-to-buy-and-sell-property.html http://www.articletrader.com/finance/real-estate/lease-options-a-different-way-to-buy-and-sell-property.html Wed, 19 Dec 2007 00:00:00 -0600
If you answered yes to either question, a lease with option to purchase (lease-option) can solve your problem. But it’s important to understand the pros and cons of lease-options to maximize your benefits.

A lease-option is a combination real estate rental, sales, and finance technique. It is a property lease for a fixed time period, such as 12 or 24 months, with an option for the tenant to buy the property at an agreed option price during the lease term. (Lease options are sometimes also called “land contracts.”)

In general, the lease-option technique is one of the quickest and least expensive methods available to investors for buying and selling real property. The purchaser is not required to conform to the various underwriting guidelines that banks and other lenders require. The seller, unlike an underwriter working for a mortgage company, requires little in the way of documentation. The seller providing the financing doesn’t care where the money for a down payment comes from as long as it comes from somewhere. After all, to the seller cash is cash.

Buyers like lease-options because little up-front cash is required. Sellers also like lease-options because they provide necessary cash flow to pay the mortgage and property taxes from a tenant who has a vested interest in treating the property well and who is likely to buy it.

A lease-purchase is different from a lease-option because it obligates the tenant to purchase the property at the end of the lease. With a lease-option the tenant has the right, but not the obligation, to purchase the property.

With both, however, the tenant usually pays an above-market rent and receives a monthly rent credit toward the down payment. And, of course, both a lease-option and a lease-purchase obligate the seller to sell the property at the previously agreed-to terms.

What hurdles will you face? It should come as no surprise that the biggest obstacle to a lease-option transaction is often the real estate agent. The reason is the agent receives only part of their commission up-front at the time parties enter into the lease-option. The commission balance is paid when the option is exercised. Many agents who can’t afford to wait for part of their commission don’t realize a lease-option is better than no sale at all.

Advantages for Sellers
Unless your property is located where there is very strong demand from buyers, lease-options can be especially advantageous for home sellers.

Primary property seller advantages are:

* Strong Demand from Prospective Buyers: No matter how slow the local real estate market might be, there is almost always good demand from lease-option buyers. Many prospective home buyers can usually afford the monthly payment but they often have insufficient cash for a down payment. The lease-option solves this problem by giving the tenant-buyer a rent credit toward the down payment. In addition, the tenant-buyer usually pays up-front, nonrefundable consideration for the option; typically several thousand dollars.
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* Top Dollar Option Price: Because of strong buyer demand for lease-options, home sellers can often demand and get top dollar for their properties. Usually the option price is set at the market value when signing the lease-option. If the market value of the home goes up during the lease-option term, the buyer benefits. If the property drops in value, then the tenant typically doesn’t complete the purchase. (That’s an advantage of a lease-option; there’s no obligation, just the right.)
*
* Higher Quality Tenants: During the lease-option, the tenant-buyer usually takes good care of the property; after all, they’re hoping to own it someday. The average lease-option tenant will take much better care of the property than a typical renter will.
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* Above-Market Rent: Another seller advantage is earning above-market rent. Landlords can usually charge tenants 10 to 20 percent above market rent levels.
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* Seller Keeps the Tax Deductions: During the lease-option period, the seller retains all the property income tax deductions. If a tenant complains about not receiving any tax benefits, a reminder about the rent credit toward the down payment usually ends the discussion.

Advantages for Buyers
Lease-option benefits aren’t one-sided deals. Advantages for buyers include:

* Small Amount of Up-Front Cash Required: The amount of up-front cash needed to acquire a home or other property on a lease-option is usually small; often just a few thousand dollars for the first month’s rent plus non-refundable option consideration. This option money is in lieu of a security deposit.
* Monthly Rent Credit Builds a Down Payment: The unique characteristic of a lease-option is the rent credit toward the buyer’s down payment. Typically, the rent credit is 10 to 100 percent of the monthly rent, depending on how motivated the seller is to sell. The higher the rent credit percentage, the greater the probability the tenant will buy.
* “Try Out” the Property before Buying: Another special lease-option benefit for the tenant is the ability to try out the property before buying. If it turns out to be undesirable, the tenant hasn’t tied up a large amount of cash in a home that might be difficult to resell.
* Control Property with Very Little Cash: Buyers enjoy great leverage; they have the ability to control a property and profit from its market value appreciation with very little cash. Lease-option buyers have this unique advantage.
* Longer Terms Mean Greater Profitability: Although most residence lease-options are for short terms, such as one or two years, smart investors seek lease-options with the longest possible term. They assume the property is likely to appreciate in market value over the long term.

As a seller, you should try to collect the maximum amount of option money you can. The more the buyers or tenants have invested in your property, the better they will take care of it. And, if they decide not to exercise their option, you’ll keep the option money – so the more you get down, the more you keep.

The amount of the premium will vary depending on where your property is located. In general, an option premium can range from $1,000 to $10,000. Your goal will be to charge what the market will bear in your particular area.

As a buyer, on the other hand, your goal will be to pay as low an option premium as possible. Why should you invest more than you have to? Then, if the property appreciates in value, when you exercise your option your profits will be greater. In effect you can build equity in the house while you’re leasing it.

To help you understand the process, here’s an example of a lease-option. A buyer has signed a lease-option agreement for a single-family house that gives him the right to purchase it at any time during the next twelve months. (Again, he doesn’t have to buy the house; he has the right.) He agrees to purchase the house for $100,000, and he gives you a $2,000 option premium. If you give the buyer $100 in credit towards the purchase of the house from each month’s rent payment, at the end of the 12-month option period the buyer would have accrued a total of $1,200 in credit that could be applied toward the purchase price. (If you wanted to be more generous and offer the buyer $200 per month in credits, you could simply increase the price of the house by a corresponding amount.)

If he exercises his option at the end of the 12-month period, then his purchase price for the house is $98,800. If he doesn’t exercise the option, you keep the credit towards the purchase and the option premium (if your original lease-option contract is written that way).

A lease-purchase works in a similar way, except the buyer has entered into a contract to purchase the house; he simply hasn’t completed that purchase. If the lease-purchase contract is for 12 months, at the end of 12 months he must purchase the home or he is in default. You keep the option premium and any credits he’s accrued if he defaults.

The lease-option technique is similar to a purchase option in that it grants the right to investors to purchase property at a predetermined price within a predetermined period of time. The lease-option technique, however, combines the basic lease or rental agreement with an option to purchase contract. Whether you are a buyer or a seller, lease-options provide greater flexibility in structuring transactions while simultaneously reducing your level of risk.


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Mark Sumpter is the founder of The Wealth College Inc, which develops comprehensive, systematic approaches to securing financial freedom through real estate investment. Mark offers a FREE audio CD on “Building Wealth Through Real Estate” by logging onto www.therealestateinvestortoday.com. He also offers a series of 52 “Short Sale and Pre foreclosure Tips That Will Make Your Pockets FAT!” absolutely FREE-of-charge by logging on www.shortsaleexpert.net

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/real-estate/why-real-estate-is-your-best-investment.html http://www.articletrader.com/finance/real-estate/why-real-estate-is-your-best-investment.html Wed, 19 Dec 2007 00:00:00 -0600
In 2003, the U.S. government published statistics regarding median home prices. Take a look at how rapidly the average home has appreciated over the past 35 years:

1970 $23,000

1975 $35,300

1980 $62,200

1985 $75,500

1990 $95,500

1995 $113,100

2000 $138,400

2005 $182,000 (estimated)

What’s interesting to note is that while prices have boomed in the past five years, prices have risen at double-digit levels in every five year period. Very few investments can match that level of appreciation over the long-term.

Real estate prices are extremely likely to continue rising. There are a number of reasons why; let’s look at just a few. Over the next twenty years, the following is expected to happen:

* The U.S. population is expected to grow by more than 40 million people.
* The U.S. median income is expected to increase by 50 percent.
* Ten million people will choose to buy vacation homes in the U.S.
* More than sixty million children and grandchildren of baby boomers will enter the housing market.
* Environmental restrictions and land shortages will tighten property development in popular areas, causing a decrease in supply and an increase in housing prices.
* More than 60 million baby boomers will seek retirement income, and many will sensibly turn to real estate investments.
* Minorities and immigrants will continue to buy homes in record numbers. Currently 75 percent of whites live in their own homes, while only 40 percent of Hispanics and Asians own their homes. As their rate of home ownership increases, demand for housing will increase.

So what’s the end result? Real estate prices will continue to rise – making smart real estate fliping a great way to grow wealth.

There are two basic ways to get income (cash) from real estate investing: buying and selling properties for a profit, or by collecting rent from tenants who occupy your properties. Most successful real estate investors do both.

If you “flip” properties, the profits can be either used as income for living expenses, or to invest in more properties. The average real estate investor doesn’t seek to earn an income from their properties (at least not at first); most try to increase their net worth. But over time, you can do both.

For example, let’s say you buy a house for use as a rental property for $150,000. If your mortgage payments, taxes, insurance, etc add up to $1,200 per month, and you collect $1,300 per month in rent, you’re generating very little monthly income. But you are building wealth.

How? Each year, more of your principal is paid off and as the property appreciates in value, your equity grows. (In effect, your tenants are paying your mortgage for you.) If interest rates fall and you refinance your loan, you may be able to widen the gap between your expenses and your rental income. Or you may choose take a “cash out” refinancing in order to free up capital for other investments. Whether you leave the equity in the property or take cash out, you’re building wealth.

As years pass, you’ll have significant equity in the property. If you hold the property long enough, you’ll eventually pay off your mortgage… and the money you were putting towards mortgage payments can now be used as income or to fund other investments.

If you’re a “buy and hold” investor, then your short-term income potential is low, but your long-term wealth potential is high, and eventually your income potential is high once your properties are paid off. If you “flip” properties, you can still build wealth by continually reinvesting profits, or you can use some of the profits as income.

In either case real estate investing is profitable and financially rewarding – and over the long-term, it’s one of the best investments you can make.


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Mark Sumpter is the founder of The Wealth College Inc, which develops comprehensive, systematic approaches to securing financial freedom through real estate investment. Mark offers a FREE audio CD on “Building Wealth Through Real Estate” by logging onto www.therealestateinvestortoday.com. He also offers a series of 52
Short Sell and Pre-foreclosure Tips That Will Make Your Pockets FAT!” absolutely FREE-of-charge by logging on www.shortsaleexpert.net.


Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/real-estate/understanding-appraisals.html http://www.articletrader.com/finance/real-estate/understanding-appraisals.html Fri, 26 Oct 2007 00:00:00 -0500
* Sales Comparison: the sales comparison method estimates a property’s value by comparing it to similar properties that recently sold in the area. Those properties are called comparables, or “comps.” An appraiser will compare “comps” to the subject property to help determine its value. Sales comparison appraisals are typically used to evaluate single family homes, townhouses, and duplexes.

Appraisers are generally required to compare the subject property to at least three comps. Since few houses are identical, the appraiser will adjust the values according to some standard formulas: for instance, if the subject property has a deck and a comp does not, the appraiser will adjust the value of the subject property upwards to compensate for the additional feature.

Sales comparison appraisals are part “art” and part “science”: the appraiser has a fair amount of latitude within which to determine the value of the property. If two different appraisers evaluate a particular property, they’ll rarely agree exactly on its value.

* Cost: the cost method determines a property’s value by calculating how much it would cost to replace. The appraiser estimates the value of the property if it was new, then deducts an amount for depreciation (wear and tear) based on the property’s current condition. The value of the land is determined by using recent sales of comps. (There is no way to estimate land value by the cost method since land can’t be “replaced.”)

Cost appraisals are more accurate when the property is fairly new, since it’s easier to estimate the replacement cost. Cost appraisals are also useful when a property is somewhat unique and suitable comparables can’t be found.

* Income capitalization: income capitalization appraisals place a value on a property based on its ability to produce income. Income capitalization appraisals are most commonly used to estimate the value of office buildings, commercial real estate, flipping houses and other rental properties. Very seldom is an income capitalization appraisal done by an appraiser; they’re done by investors. In effect the investor is determining how much they’re willing to pay – which becomes what the property is worth (to them.) You’ll see why investors perform this calculation in a moment.

Since determining value by the income capitalization method is something you’ll need to be able to do, let’s look at it more closely. The process is simple: first calculate the gross income (rent) for the property and then subtract an amount for typical operating expenses like loan payments, taxes, maintenance, insurance, and other costs. The result is the net income the property is expected to provide.

Let’s use the following example:

Gross income $50,000

Expenses $40,000

Net income $10,000

You’ve calculated that the property will produce $10,000 per year in net income. Now you can decide how much you’re willing to pay for the property.

You can calculate the value by using the formula:

Value = net income / capitalization rate

The capitalization rate is the expected rate of return. Let’s say in this case you want to get at least a ten percent rate of return; if you don’t, you’d rather invest your money elsewhere. The math is easy:

Value = $10,000 / 10%

So, the value of the property to you is $100,000. That’s the most you can pay in order to get a ten percent rate of return. In effect, then, that’s the property’s value – to you, at least.

Say you’re willing to accept a 7 percent rate of return. Here’s the formula:

Value = $10,000 / 8%

The value of the property is now $125,000. That’s the most you can pay in order to receive the seven percent rate of return you want.

As you can see, an appraiser isn’t the right person to perform an income capitalization appraisal – the appraiser doesn’t know what rate of return you are seeking. The appraiser can perform a cost approach appraisal to provide a different view of the property’s value, but if you’re investing for income, the income capitalization approach is the only way to be sure you’ll get the rate of return you seek.

Appraisals are important to buyers, sellers, and lenders. Lenders use appraisals to make sure they don’t loan more than the property is worth. Sellers use appraisals to make sure they aren’t over-paying for a property and buyers use appraisals to help them properly value their properties for sale. Understanding appraisals will make you a better real estate investor.

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Mark Sumpter is a national speaker, author and full-time real estate investor. He is the founder of The Wealth College Inc, which develops comprehensive, systematic approaches to securing financial freedom through real estate investment.
He also offers a series of 52 “Short Sale and Pre-foreclosure Tips That Will Make Your Pockets FAT!” absolutely FREE-of-charge by logging onto www.shortsaleexpert.net

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/real-estate/insurance-why-you-need-it-and-how-to-shop-for-it.html http://www.articletrader.com/finance/real-estate/insurance-why-you-need-it-and-how-to-shop-for-it.html Fri, 26 Oct 2007 00:00:00 -0500
Title insurance protects against losses arising from events that occurred prior to the date of the policy. Coverage ends on the day the policy is issued and extends backward in time for an indefinite period. (This is in stark contrast to property or life insurance, which protect against losses resulting from events that occur after the policy is issued, for a specified period into the future.)

The title insurance required protects the lender up to the amount of the mortgage, but it doesn’t protect your equity in the property. For that you need an owner’s title policy for the full value of the home. In many areas, sellers pay for owner policies as part of their obligation to deliver good title to the buyer. In other areas, borrowers must buy it as an add-on to the lender policy. I recommend doing this because the additional cost, above the cost of the lender policy you have to get, is relatively small.

Protection under an owner’s policy lasts as long as the owner or any heirs have an interest in or any obligation with regard to the property. When they sell, however, the lender will require the purchaser to obtain a new policy. That protects the lender against any liens or other claims against the property that may have arisen since the date of the previous policy – in other words, against something you may have done.

For example, if the contractor you failed to pay for remodeling your kitchen places a lien on your home, you are not protected by your title policy: the lien was placed after the date of the policy. You will probably be required to get the lien removed before you can sell the property. But in the event the lien hasn’t been removed and a search has failed to uncover it, the new lender will be protected by a new policy.

You can shop around for title insurance. Unlike mortgage insurance, where the carrier is always selected by the lender, borrowers can select the title insurance carrier. Few do, however. Most leave it up to one of the professionals with whom they’re dealing: the real estate agent, the lender, on line real estate courses or their attorney. This means that competition among title insurers is largely directed toward these professionals who can direct business rather than toward borrowers.

And it can pay to shop around. It’s difficult to generalize because market conditions vary state by state, and sometimes within states. I would certainly shop in states that do not regulate title insurance rates: Alabama, District of Columbia, Georgia, Hawaii, Illinois, Indiana, Massachusetts, Oklahoma, and West Virginia.

You would be wasting your time shopping in Texas and New Mexico, because these state set the prices for all carriers. Florida also sets title insurance premiums but not other title-related charges, which can vary.

In the remaining states it may or may not pay to shop. Insurance premiums are the same for all carriers in “rating bureau states”: Pennsylvania, New York, New Jersey, Ohio, and Delaware. These states authorize title insurers to file for approval of a single rate schedule for all carriers through a cooperative entity. Yet in some there may be flexibility in title-related charges. More promising are “file and use” states — all those not mentioned above — that permit premiums to vary between insurers.

It’s a good idea to ask an informed but disinterested person whether it pays to shop in the area where the property is located. Just keep in mind that those likely to be the best informed are also likely to have an interest in directing your business in the direction that’s to their advantage.

Title insurance protects against losses that might occur due to another party claiming ownership of the property.

Title insurance covers:

* Issues missed by the title examiner
* Issues missed when a deed or other public document is determined to be invalid or forged
* Liens from unpaid taxes or from a former owner.

Title insurance will pay your legal fees if you have to go to court to defend the deed, and if you lose the property, the title insurance will cover your loss up to the amount of the policy.

Keep in mind that if you’ve owned the property for a few years and it has risen in value, the title insurance policy you purchased at closing will only reimburse you for the original amount, not for the new value of the property.

You may be thinking, “Wait a minute… if I pay an attorney to perform a title search, why do I need title insurance? Isn’t it his or her job to make sure the title is clear?” Yes, it is… but unexpected problems can pop up – title insurance is a cheap way to avoid the cost of major problems that could pop up.

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Mark Sumpter is a national speaker, author and full-time real estate investor.Mark offers a FREE audio CD on “Building Wealth Through Real Estate” by logging onto www.therealestateinvestortoday.com.
He also offers a series of 52 “Short Sale and Pre-foreclosure Tips That Will Make Your Pockets FAT!” absolutely FREE-of-charge by logging onto www.shortsaleexpert.net

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/real-estate/set-goals-to-succeed-in-short-sales.html http://www.articletrader.com/finance/real-estate/set-goals-to-succeed-in-short-sales.html Fri, 26 Oct 2007 00:00:00 -0500
Goals are like building blocks: extremely short-term goals support other short-term goals, and short-term goals support mid-term and long-range goals. To determine your short-term goals, you’ll have to determine your long-term goals first.

Let’s say your goal is to own $10 million in real estate in twenty years. Great! Now you have to get there. You can break that goal down into manageable chunks:

* After five years: own $1 million in real estate.
* After ten years: own $3 million in real estate.
* After fifteen years: own $7 million in real estate.
* After twenty years: own $10 million in real estate.

Now you can break that down further:

* After one year: own two properties worth $175,000.
* After two years: own four properties worth $350,000.
* After three years: own six properties worth $550,000.
* Etc.

If you keep breaking your goals down into more and more manageable chunks, what seems like an insurmountable task – owning $10 million in real estate – can actually be quite achievable. And if it feels manageable, you’ll have more confidence, and you’ll be more likely to stay on the path to your dreams.

For instance, let’s say you currently don’t own your own home – say you own no real estate at all. But, based on the above goal breakdown, your goal for your first year is to own two properties worth $175,000. How will you get there? Here’s how you could break it down:

Goal: Own Two Properties Worth $175,000 in One Year
Month 1
Week 1: Meet with at least two lenders to determine if I qualify for financing. If I don’t, focus on seller-financed properties, see if relatives will co-sign on loans, and identify other creative financing possibilities by the end of the week.

Meet with and interview at least three real estate agents to find an agent you’re comfortable with, and who has the kind of expertise you’re looking for.

Look at newspaper listings, internet listings, and local real estate agency,pre foreclosure home advertisements for at least thirty minutes every day to get a sense of available properties and the local market.

Week 2: Choose an agent and make appointments to see at least four properties that fit your needs and financial situation.

Plan to generate as much capital for a down payment as you can: sell assets, shift money out of stocks or other investments (if necessary).

Call sellers offering owner financing, make appointments to inspect appropriate properties.

Week 3: Determine if any available properties are suitable for you; if so, assess their value and make an offer. Negotiate as necessary.

Find a good real estate attorney to handle your real estate affairs.

Week 4: Finalize contract (if negotiations are successful); if not, continue inspecting at least four properties per week. If successful, begin process of finalizing transaction; in the meantime, continue inspecting at least two properties per week for future investments.

…

Week 26: Make offer on second property…..Etc.

If you work backwards from the creation of long-term goals to mid-term and short-term goals, you’ll create an action plan that will allow you to reach your dreams in short sales or otherwise. It’s not hard to do, and it can be really fun – simply think as big as you like, and then work backwards to decide what you’ll need to do to make your dreams happen. Don’t start from where you are today; start from where you want to be, and work backwards to today.

To make your own goal worksheet, simply take a pad of paper and put your long-term goal at the top. Then, in outline form, break down the intermediate steps you’ll need to achieve them. Under those steps, break down the tasks further. When you’re done you should have short-term goals you wish to reach that are no longer than one week in duration – if you allow yourself too much time, you’re more likely to put them off.

Once a goal or task is complete, check it off your list. You’ll enjoy the sense of accomplishment, and you’ll stay on track with your action plans.

Remember, you can revise your action plans at any time. If you find an investment that’s too good to pass up, you might change your short-term goals. Just make sure you don’t change your goals or your action plans due to inactivity – you’ll never reach your dreams if you don’t take action on a consistent basis. It will take work and effort, but you can do it. Thousands of people are successful real estate investors – there’s no reason you can’t be, too.

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He is the founder of The Wealth College Inc, which develops comprehensive, systematic approaches to securing financial freedom through real estate investment.
Mark offers a FREE audio CD on “Building Wealth Through Real Estate” by logging onto www.therealestateinvestortoday.com.
He also offers a series of 52 “Short Sale and Pre-foreclosure Tips That Will Make Your Pockets FAT!” absolutely FREE-of-charge by logging onto www.shortsaleexpert.net

Source: http://www.articletrader.com ]]>