5 Magic Paths to Making a Fortune in Real Estate, Second Edition - Softcover

Lumley, James E. A.

Softcover

ISBN 10: 0471548251 ISBN 13: 9780471548256

Verlag: Wiley, 2004

Inhaltsangabe

A new and revised edition of the commonsense guide to real estate riches

More and more people are discovering that real estate investing is a safe and affordable way to increase their cash flow and build lasting wealth. If you want to achieve financial freedom, then look no further. 5 Magic Paths to Making a Fortune in Real Estate reveals the proven real estate investment strategies that many of today's millionaires used to make their fortunes. In fact, you don't even need a lot of money to start investing and start putting cash in your pocket today!

Real estate expert James Lumley offers simple, straightforward explanations of the most common and lucrative approaches to property investment--including fixer-uppers, lease/options, wholesales, buy-and-hold, and single-and multifamily rentals. You'll understand all the basics of real estate and learn to use these five strategies to make a killing in any economy. Packed with new information--including sections on the IRS's simplified tax exchange rules and the capital gains exclusion--5 Magic Paths to Making a Fortune in Real Estate will show you how to:
* Find foreclosed, repossessed, or condemned properties
* Research the markets and perform valuations
* Determine what you can safely afford
* Negotiate with sellers and buyers
* Find the best financing terms, including seller financing
* Price and perform money-making repairs
* Work with agents and contractors
* And much more!

Über diesen Titel

Über die Autorin bzw. den Autor

JAMES E. A. LUMLEY is a real estate broker with more than thirty-five years of experience as a real estate salesperson, consultant, and educator. He is also the author of How to Get a Mortgage in 24 Hours and Challenge Your Taxes, both from Wiley.

Von der hinteren Coverseite

A new and revised edition of the commonsense guide to real estate riches

More and more people are discovering that real estate investing is a safe and affordable way to increase their cash flow and build lasting wealth. If you want to achieve financial freedom, then look no further. 5 Magic Paths to Making a Fortune in Real Estate reveals the proven real estate investment strategies that many of today s millionaires used to make their fortunes. In fact, you don t even need a lot of money to start investing and start putting cash in your pocket today!

Real estate expert James Lumley offers simple, straightforward explanations of the most common and lucrative approaches to property investment including fixer-uppers, lease/options, wholesales, buy-and-hold, and single-and multifamily rentals. You ll understand all the basics of real estate and learn to use these five strategies to make a killing in any economy. Packed with new information including sections on the IRS s simplified tax exchange rules and the capital gains exclusion 5 Magic Paths to Making a Fortune in Real Estate will show you how to:

• Find foreclosed, repossessed, or condemned properties
• Research the markets and perform valuations
• Determine what you can safely afford
• Negotiate with sellers and buyers
• Find the best financing terms, including seller financing
• Price and perform money-making repairs
• Work with agents and contractors
• And much more!

More and more people are discovering that real estate investing is a safe and affordable way to increase their cash flow and build lasting wealth. If you want to achieve financial freedom, then look no further. 5 Magic Paths to Making a Fortune in Real Estate reveals the proven real estate investment strategies that many of today’s millionaires used to make their fortunes. In fact, you don’t even need a lot of money to start investing and start putting cash in your pocket today!

Real estate expert James Lumley offers simple, straightforward explanations of the most common and lucrative approaches to property investment––including fixer-uppers, lease/options, wholesales, buy-and-hold, and single-and multifamily rentals. You’ll understand all the basics of real estate and learn to use these five strategies to make a killing in any economy. Packed with new information––including sections on the IRS’s simplified tax exchange rules and the capital gains exclusion––5 Magic Paths to Making a Fortune in Real Estate will show you how to:

• Find foreclosed, repossessed, or condemned properties
• Research the markets and perform valuations
• Determine what you can safely afford
• Negotiate with sellers and buyers
• Find the best financing terms, including seller financing
• Price and perform money-making repairs
• Work with agents and contractors
• And much more!

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

5 Magic Paths to Making a Fortune in Real Estate

By James E.A. Lumley

John Wiley & Sons

Copyright © 2004 James E. A. Lumley
All right reserved.
ISBN: 978-0-471-54825-6

Chapter One

Five Magic Paths to Making a Fortune in Real Estate

For many people, real estate has been the investment of choice to become wealthy. In no other way can you consistently and safely make substantial amounts of money. In this first chapter we'll take a look at each of the five "magic paths" to use real estate to gain financial freedom. We'll also look at how these techniques work with one another. We'll talk about how you can get started with little or no money and with modest work in your spare time on a road paved with great profits for years-a road where you are your own boss, you make your own time schedule, and, as you master these skills, you prosper.

THE FIVE MAGIC WAYS TO WEALTH

The general benefits of real estate that can make you wealthy were discussed in the Introduction, so now we'll turn our attention to a brief view of each of the five techniques explored in this book and how you can be flexible enough to profit with each one.

1. Buy and fix up single-family houses for resale. This is one of the greatest markets of all time. Nowhere else can the average investor start increasing wealth faster. Many of the skills needed are commonsense ones. First, you secure a property that is priced reasonably because it needs repair. Then, you manage or do these repairs yourself; and finally, you resell the property to a retail home buyer. Sound complex? Not at all. Because the single-family fixer-upper can be sold or rented to a huge market of buyers or renters, it's one of the most common real estate ventures. And you can find as much help as you need. If you work with a real estate agent, you'll discover his or her expertise in property values to be worthwhile. If you work with a carpenter or contractor, you will easily find out the expense of needed repairs. The fixer-upper is one investment opportunity that's win-win. It's ideal for getting started and generating cash, particularly for those investors who don't mind rolling up their sleeves and doing the necessary repairs themselves, at least to get started.

You start by looking for single-family properties that may be in distress but that do not require major repairs and that are low enough in price to permit a robust profit on resale. Two to four deals a year will earn you more than, for example, the average teacher's salary. One of the ways you will obtain property is through a lender, mortgage company, tax authority, or other lien holder that has foreclosed on a property. As foreclosures often need rehabilitating, they remain one of the best opportunities for acquiring fixer-upper properties. Since obtaining a foreclosed property is different than negotiating with a home seller, we address this separately. Here you will gain the special knowledge needed to make this area profitable.

2. Buy or control property to wholesale or "flip" to another investor. An alternative version to buying the fixer-upper, doing the work, and reselling it is to secure the property by contract and assign your position in the contract to another who will close and do the work. This is called wholesaling or flipping. Wholesaling or flipping a property means that you sell a property, normally as is, very soon after you secure it by agreement. Some investors concentrate on wholesaling as a primary activity. You might take title and resell in a simultaneous closing-buy and sell at the same sitting-or sell before taking title.

Wholesaling is perfect if you don't want to take title on a property and follow through with the necessary amount of fixing up and waiting for a retail buyer to come along. It's also great if your skills lie in negotiating deals with owners, or time constraints work against your doing the necessary repair project. It's a great way to make a profit without spending a lot of time, tying up much cash, or triggering a mortgage commitment. You may not make as much profit wholesaling as if you took title and completed the repair work, but then for little effort your modest gain will be a significant profit in a deal that may require little down payment.

3. Lease/option or "rent-to-own" property from a seller and contract future sale with a new tenant-purchaser. In lease/optioning property you control a property by leasing it from a willing owner who gives you an option to purchase the property sometime in the future. Favorable lease terms such as low monthly cost, long duration, ability to sublease, and a reasonable purchase price in the future are all terms you want to negotiate. In a typical lease/option deal you become sublandlord and rent out your leased property-for a higher price than you pay to the owner-to a tenant committed to buy at some future time. To insure this purchase you receive from your tenant-buyer a down payment, and in turn you give a credit of the monthly rent toward the agreed-upon purchase price. Only at the future closing will your renter take title.

It's an advantage for this renter because it gives him or her a chance to build up equity in rent credit as well as time to save more down payment before taking title. The renter also gains any appreciation in the property. For you as an investor it allows a profit as you net the difference between the lease amount you pay the owner and the rent the tenant pays you, while further receiving a cash gain at the closing of the future sale. Although you may not gain as much profit in comparison to that of outright ownership, the deal is similar to wholesaling in that you are able to avoid making a large down payment or securing a mortgage. And you could sell or assign your position at any time. A lease/option can be attractive to a current owner who wants to get rid of the day-to-day responsibility of running the property while procuring a specific future sale.

A variation of the lease/option technique is only to negotiate an option-the right to buy at some future time-without passing this right on to a tenant. In this way, with limited risk to yourself, you control the appreciation of the property and have time to arrange for financing for a future close and/or find a buyer.

4. Buy and hold single-family houses for long-term investment. The first three "magic paths" deal with several short-term techniques of ownership and control. The fourth involves buying and holding the single-family home for a longer period. The buy-and-hold technique relies on the long-term appreciation of a property over a 3- to 20-year period. Here we examine the continuing renting and management of a single tenant in one property and how it differs from shorter-term techniques. Buying and holding a house that does not necessarily need rehabilitation but perhaps is worthwhile because of location or price can end up being a bargain as time increases its value. Many investors have used their investment skills to profit from long-term single-family rentals.

5. Buy and hold multifamily apartment and small commercial properties. You might stumble onto a six-unit apartment building or a small commercial building that may need fixing up (and what one does not?) and you decide to make the repairs and resell it right away. That's fine. Or, as you just read in the previous section, you might also decide to buy and hold a single-family property. That's okay, too. However,...

Details zur Ausgabe

• Verlag: Wiley
• Erscheinungsdatum: 2004
• Sprache: Englisch
• ISBN 10: 0471548251
• ISBN 13: 9780471548256
• Einband: Taschenbuch
• Auflage: 2
• Anzahl der Seiten: 340
• Kontakt zum Hersteller: Wiley-VCH GmbH; product_safety@wiley.com; ; Boschstrasse 12; Weinheim; 69469; Deutschland