One Rate Real Estate
One rate real estate is an excellent option for individuals who desire a fixed rate of return on investments. The process is relatively simple; however it is imperative to work with a reputable real estate investor who possesses a solid track record in flipping houses.
There are four steps to one rate real estate investing. The first step involves locating a private investor. This can be accomplished by asking friends, relatives, neighbors or co-workers for a referral or by conducting research via the Internet.
Many real estate investors own websites. Using your favorite search engine type in the name of your state or city plus the words "real estate investors". For instance, if you want to locate investors in California, type "California real estate investors."
Contact each investor and ask for copies of successful real estate transactions and a list of referrals. Use the Internet to conduct further research on potential investors. Check with the Better Business Bureau to see if any complaints have been filed. Engage in due diligence to ensure you are working with a reputable and reliable source.
The investor will locate potential investment property. Oftentimes, these properties consist of foreclosure or bank owned homes, short sale real estate or probate properties. Each offers pros and cons and all options should be discussed prior to purchase.
Foreclosure homes are purchased through public auctions. Bank owned properties are homes that did not sell through foreclosure auctions. Foreclosed and bank owned properties are often referred to as distressed properties; meaning they require repairs or renovations. Distressed real estate is typically sold for 60- to 70-cents on the dollar.
Some lenders offer the option of short sales to homeowners delinquent on their mortgage note. Lenders agree to accept less than is owed on the loan if the borrower can locate a qualified buyer and expedite the sale of their home. Oftentimes, short sale properties can be purchased for as little as 50-cents on the dollar if the buyer provides cash instead of obtaining traditional financing.
Probate properties involve real estate which belonged to a person who has died. Probate is the legal process used to assess value of the decedent's estate; validate the Will; and distribute assets to named beneficiaries.
Probate is notorious for dragging on for months. During the probate process, the estate is responsible for all paying costs associated with the property. Estate administrator's can elect to sell the property to eliminate financial responsibility. Probate real estate is oftentimes in great condition and requires little repair.
Once a property is located, you will provide necessary funds to the investor. This is known as a soft money loan. Buying houses with cash is preferred over borrowing funds through a hard money lender. Also known as "private money" loans, hard money lenders charge interest rates as high as 18-percent. Additionally, private hard money lenders usually include prepayment penalties stating the property cannot be sold for at least six months after obtaining the loan.
Buyers who provide cash loans to investors generally yield a return of 1-percent per month of the mortgage note. If you provide $100,000 cash to an investor, you will receive $1,000 per month until the property sells. Once a buyer is located, the investor sells the home for profit and returns your initial investment.
One rate real estate investing is just one way to profit. We invite you to discover additional options by perusing our free real estate investing article library. Here you will find information and resources on foreclosure homes, probate properties, short sales and bank owned real estate and other investment opportunities.
Tagged: Buying Houses, Distressed Properties, Flipping Houses, Free Real Estate Investing Articles, Investment Property, Mortgage Note, One Rate Real Estate, Probate Properties, Real Estate Investors, Short Sales
Published on May 22, 2009 at 02:59 AM
| | Printer friendly