Getting High on OPM to Grow Your Real Estate Empire

OPM = OTHER PEOPLE'S MONEY. This is money which you might borrow from banks, finance companies, insurance companies, friends, etc. It also is that money which YOU might raise in a stock offering or through the sale of limited partnerships to buy real estate.

No matter how YOU raise the money, OPM is MONEY YOU PUT TO WORK TO EARN MORE MONEY. Today people don't boast about how much money they have-instead they boast about how much they owe! No longer is it a shame or a disgrace to owe money. In this modern age, the more you owe to others for business and property deals, the bigger your position in the world!

You must have heard the saying that 'you've got to have money to make money'. What you need is other peoples money to get rich. The famous 17th century author, John Ray rightly wrote "Money begets money." It is OPM that creates the financial leverage.

One of the greatest advantages of real estate investing is the power of leveraging other people's money or OPM. In real estate investing we buy real estate with 10% or 20% down and yet we control100% of the property. When a property appreciates, it will appreciate on the total value of the property and not on the initial investment amount. This can increase returns many fold.

By using Nothing Down techniques you can use the ultimate leverage of OPM of buying property with little or no money down. Thousands of people have become millionaires by using the power of financial leverage in real estate investment.

Your goal is to not use your own cash. The most successful real estate investors use OPM (Other People's Money). Keep this in mind as you start to invest. You must hold on to your funds to meet any contingencies. Use OPM to buy as many properties you can that can be supported by your cash flow.

Why use your own money when so many people and businesses are willing to let you use theirs? Banks, institutions and private investors are willing to give loans for real estate investments because property is tangible, fixed and a secure asset. But before you run to the bank to borrow heaps of money you should understand how leveraging works.

Real estate OPM can come from a variety of sources with the most common being a bank. There are also individual investors or groups of investors looking to fund real estate purchases in order to get a steady stream of income. Getting equity partners is a great way of funding when the returns along with the risk are high which a normal bank will not fund.

Retirement plans and insurance funds are a great source of real estate investment funds.Many people don't even know they can use their retirement plans funds to invest in real estate. Most people forget they even have money in a retirement account once it is stashed away. Dead equity in your residential house can be used to fund your investment properties.

Many real estate investors think that money (or lack of money) is what stops them from buying real estate. This is not true. It is a myth that holds many investors back. Understand that money is NEVER an issue. IF the deal is right, the money will come. Simply think creatively, go to the right source of funds and simply ask for money. The worst that can happen is you get a "NO". Each no only places you closer to a "YES".

You will be surprised to find how many banks, institutions and individuals are willing to fund your real estate investments. Just look for them in the news papers or do a search on the internet. Find a good mortgage broker. Write to the lenders and meet them with your proposal. Try and understand the lending criteria. Money is never an issue when it comes to a good investment property.

Every lender is different and have different lending criteria's. You have to be creative and customize your proposal to the specific "hot buttons" for each funding source.

Owner or vendor financing can be a great source of OPM. When you find motivated sellers, they will be open to many of your suggestions. By listening carefully to the seller's stated needs you can custom tailor a solution that meets those needs. If you can find a solution to their problem it will make them happy and they will be able to leave some money in for you.

Vendor financing is nothing more than the owner being willing to act as a finance company or bank in a real estate transaction. Instead of you going to a mortgage company and filling out a lengthy application form many sellers will be willing to play the part of the bank if you are able to solve their problem and give them the required confidence.

Credit cards are a great source of short term funding for real estate investors.If used judiciously they give access of up to 50 days interest free financing. Pay off your balance every month and you have access Other People's Money. This money can be used for down payments and quick do ups before either flipping the property or refinancing the property for no money down deals.

Tenants form a useful part of OPM strategy. If you invest correctly, your tenants pay 100% of all expenses, including the mortgage, with true passive income left over for you each month. Since the real estate correction started, getting positive cash flow property has never been easier. Tenants maximize OPM and maximize your wealth!

Before using other people's money (OPM) to increases your real estate investing power you have to first build good credit relationships, prove to be trustworthy in your past credit dealings, and have a good FICO credit score. When you use OPM you must calculate how you're going to repay the individual or institution who loaned you the money. Remember using other people's money has been the way many honest poor men have become rich.

It is important for you to protect your self from claims against you when you are using OPM. This is because at times things go wrong in spite of your best intentions and commitment. You have to set up right legal structures before you start your real estate investment plan. As long as you are operating as a corporation the debt is assigned to your business and debtors can make no personal claims against you. Any prudent real estate investor will separate all their business activities from their personal assets by incorporating proper structures at the onset.

Using Other Peoples Money correctly gives you a chance to building enormous wealth quickly. All you need is to have a great investment property to match the money you borrow and you're off on a glorious road to creating wealth. The other advantages of OPM are:

*Having money makes you work harder and you will have a greater chance to hit it big.

*With money in hand you can concentrate on the real estate aspects of each deal, improving your chances of success.

*Money in the bank, even borrowed funds, gives you more confidence so you work relaxed and close more big deals.

*Cash on hand can help you to obtain large discounts on cash offers.

*Having money readily available allows you to buy property at a discount while your competitors are fumbling around to find the needed cash.

*Lastly, with cash in your hands, people chase you for deals. This gives you independence, freedom of action, and the ability to make the best deals for yourself.

Never overlook the importance of having money in your pocket even if it is OPM. It may seem silly but it's true. OPM can put you in a money-making state of mind. You can earn more because you have more!

Yucatan Real Estate

While the main focus of Yucatan real estate tends to be the charming colonial homes in the capital city of Merida, there are also excellent beachfront options available along the beaches stretching across the north of the Peninsula.

While the main focus of Yucatan real estate tends to be the charming colonial homes in the capital city of Merida, there are also excellent beachfront options available along the beaches stretching across the north of the Peninsula. Consider some of the benefits of this area.

Very Quiet Lifestyle - The north shore of the Yucatan Peninsula is relatively low in tourism compared to bustling centers around Cancun. This means that you can live quietly on the beach, really away from everything even away from other people who are trying to get away from it all! The beaches are beautiful, as is the nature. Those who choose an in-town Yucatan home for sale will also find that the villages are small, quiet and neighborly.

Prices are Low While this is especially true of Yucatan land for sale out along the coast in the small towns and between, it is also true in town, as well as home ready to use. Fixer-upper homes have become a favorite in some of the towns. In all cases, prices are SURPRISINGLY low. The cost of living is also very low, in everything from groceries, to property taxes, from health care to traveling.

Ecological Areas are Available Further to the east along this stretch of beachfront, actually, there are large protected areas, such as Rio Lagartos, which is a large nesting ground for flamingos. Ecological beachfront lots can be found directly within the protected areas, offering the possibility of living a life in close contact with nature, while still living comfortably. If the other areas offer a quiet lifestyle away from it all, these offer it that much more!

Close Access to Airports The north coast of the Yucatan Peninsula has close access to two major international airports Merida (between 30 minutes and 2 hours away) and Cancun (between 1 and 3 hours away.) This makes arrival easy and affordable. Since most real estate attention has been looking southward from Cancun, beachfront lots and homes fairly close to both can be found that are still quiet, undiscovered and affordable.

Close to Modern Services For this same reason, owners can find a full range of modern services close by, including large supermarkets, sports complexes, malls, movie theaters, state-of-the-art hospitals and golf courses. The communities along the beachfront offer the basics, such as groceries, a few stores and banks.

If you have been looking for your own corner of beachfront paradise on the Yucatan Peninsula, consider the northern coast area for a quiet lifestyle and lower prices.

Real Estate Slow Down In India

There has been an overall slowdown in real estate industry and various industry players have been affected. Some factors responsible for this slowdown can be increase in interest rates, slowdown in IT industry, increase in property prices, and increase in interest rates loan rates because of which many property buyers have stepped out of market. But somehow this slowdown can bring happiness to those middle class buyers who have been eagerly waiting for the property prices to come down. In major cities such as Delhi, Mumbai, Bangalore, Chennai and Hyderabad real estate market has come down. Also because of increase in cost of raw materials like steel, iron and building material builders are facing difficulty of constructing property at agreed prices.

Real estate slow down in Bangalore

As realty business in Bangalore has been hit by global financial crisis because of this uncertain condition in Indian equity market and property prices builders have come in formidable situation .The condition is that approximately 400 flats or more are still vacant despite of advertisements .And the situation is same with may top builders of country. Many builders' developers said they have faced a drop in new projects as compared to last year because of which condition has become worse in the market.

Real estate slow down in Hyderabad

Because of Realty business is facing a slow down developers have decided to launch special schemes to attract buyers like launching special incentive prices etc. Also prices which were at some time had gone up are now cooling off because of which there is low growth rate. There are many factors that have contributed to the present scenario and may small buyers have backed out from the scene because of high interest rate, increase in input cost and strict rules. India's largest real estate company DLF which has built may commercial and residential projects has announced that they will make high end luxury apartments at affordable prices in Hyderabad after seeing IT and real estate slow down.

Real estate slow down in Delhi

Delhi/NCR has also been badly affected with this realty slow down .Some real estate developers or agents have shut down their business and switched to other business because of this slowdown as it was being difficult for them to survive in these conditions.

Real estate slow down in Mumbai

Mumbai Real estate is a very large market with many Top builders and developers under its belt. But there also Developers have to cut down their prices for new homes for sale as condition of market has still not improved yet. As Mumbai has a large market for supply of high-end apartments as compared to other cities still there is a fear that of oversupply as many buyers have backed out.

This may be the current situation of Realty business in major metropolitan cities but there was also a time when a handsome salary package of six figures meant a home in the heart of metropolitan city .But the property boom turned down this dream of many people .Now we can say that only rich people are finding a home for themselves in theses metropolitan cities. With trembling condition of sensex and liquidity scare in banking sector the real estate industry has to come up with ways for attracting buyers. But sources are saying that this is a temporary condition and real estate developers are hoping the conditions will improve soon

How To Determine If A Deal Is Good For Real Estate Investing

Being able to recognize a good deal is crucial to the success of a in real estate investing business. While you may come across so many properties for sale, not all of them qualify as profitable real estate investments.

So how do you tell which deals to pursue and which ones to trash?

You must follow a simple business model to be a successful real estate investor. It is necessary to develop ball-park figures that help you analyze deals whether you wholesale properties, do lease options, fix and flip, keep as rentals, etc.
The following 3 steps apply when analyzing your deals:

1) Pre-screen your sellers
You must pre-screen all your motivated sellers to gather all the information necessary to analyze your deals. It is important that you invest in a real estate investor website that helps you pre-educate motivated sellers, pre-screen them and pre-negotiate with them.

The information you receive through your website is enough to know if you have a deal or not.

If you still have to pre-screen motivated sellers over the phone, then you must have a script with simple questions that provide all the numbers you need to make a quick calculation.

2) Run comparable sales
You then need to determine how much the house would cost TODAY if it was sold in perfect condition.

3) Analyze your offer
Armed with this information, you can then determine if you have a deal or not. Of course, the mortgage balance and the asking price are the main determining factors when making this determination.

a) Wholesale deals
If the house costs 70 cents on the dollar minus repairs or lower, it probably qualifies as a wholesale deal. You should aim for 65% minus repairs in a poor real estate market.

You must also calculate your profit in this calculation. So if you want to make 00, your buying price would be 65% minus repairs minus 00.

You have to remember that the lower your buying price, the lower you can flip it and the faster you can sell it.

b) Rentals and lease options
If the house needs no repairs and does not qualify as a wholesale deal, then it probably qualifies as a good deal for rentals and lease options.

You therefore need to know the rental rates in the area. Obviously, the monthly mortgage payment must lower than the rental rates for this to be a viable deal. For example if the mortgage payment is 50 and the rental rate is 00, you have at least 0 monthly cash flow.

It is a good idea to use the rental rates for lease options, though you can fetch a higher monthly payment with a lease option.

It is always important to have equity in the deal for this to work.

c) Short sales
A short sale is viable if none of the options above cannot work and the mortgage payments are late.

You can get better results with properties with more than one mortgage.

We have covered short sales in separate articles.

What You Must Understand Before Working With A Real Estate Agent

In this article are a number of tips on picking the right agent, as this is a significant part when purchasing your own home or land. The first question most people will ask is, why use a realtor anyway? Why can't I figure this out without any help? Also, is a real estate agent the same as a broker? Is there a difference between the two? This info is fairly valuable whenever you pick somebody to assist you in handling such a purchase.

As we see it, the primary argument for hiring a licensed real estate agent is that he or she knows the ins and outs of business a whole lot more than you probably do.

While laws and regulations may differ between different areas of the country, a real estate broker is generally more skilled with a lot more practical experience than a real estate agent. The knowledge necessary to become a real estate broker is more detailed and a bit more difficult in order to obtain one's license to practice. Secondly, a real estate agent cannot work alone, and has to work with a broker. However, a licensed broker could work by himself or employ the service of sales people; still, the broker is going to be responsible for the agent's actions. A licensed realtor is a member of the National Association of Realtors., Agents adhere to a rigorous code of ethical values. Even so, this doesn't necessarily mean that one Realtor would be ethically better than another would.

You will discover fundamental disparities amongst realtors as well, and some of the differences depend on what individuals they work for. The realtor who lists a property represents the person selling the property, and is contractually required to protect the seller's interests. Now, a buyer's agent, often known as a selling agent (needless to say, it is a bit complex), is an agent who works exclusively for those wishing to purchase property. To further complicate matters, there is the dual agency, where different agents work with only one broker, but one agent may be a buyer's agent while the second one is the listing agent.

To locate a reliable realtor, you have to do some research and speak with a few different agents. As well as asking people you know for referrals, you could also do a little online investigation. For example, if you are searching for Seattle realtors or another area, add the city name inside the search box.

Search for practical experience. Seek out those with a good amount of expertise and have been working in the neighborhood for several years. As an illustration, you will find there's a high turnover rate for real estate professionals, in some areas versus others. Ideally, you would like an agent who may have in excess of a couple of years of sales.

Hunt for professionals that serve a wide segment of the region.

Some real estate agents work on their position on a part time basis, and concentrate mostly in a particular price bracket. An agent is this position may not have enough time in order to bring you to a decent number of properties, especially if your spending budget doesn't fall within the range they happen to be specializing in. Seek out agents that cater to all selling prices and have a committed staff of agents there on a full time basis.

Wherever you are trying to find real estate brokers, the guidelines for discovering the right agency will be similar. You may notice some differences in the way in which agents function in various neighborhoods, but a truly qualified realtor will act in your best interests to help get you a residence according to your unique requirements.

Estimating Real Estate Buying Benefits

Before buying real estate, estimate just how beneficial buying this property will be for your specific needs. If you are looking for a family home, for example, you know the importance of buying what you love and what will work for your family's specific needs and concerns. Aside from this, though, you also need to consider if the facility is going to be worth the money you pay for it. Is this a good financial investment in your future? Since the purchase of a home is the largest investment most families will make in their lifetime, it pays to invest wisely only after considering all of the facts.

Property Use

One of the first things to do is to determine if the real estate parcel, which includes the building and the land, fits your specific needs. Does it fit your budget and provide for your specific family needs including size, features, and location? Even if you are buying rental property or a space for your business, these elements remain very important. You need to know the details to know if it is worthwhile.

Current Condition

Next, consider the current condition of the property. Having a home inspection from a professional is worthwhile. In fact, most professional renters will spend some on having an inspector come into the property before they actually make the purchase. You also need to consider any problems with the property such as issues with major systems, drainage, flooding, pests and repairs. Is it worth buying this home knowing what you have to put into it to make it a livable space? This is a very individual decision.

Long Term or Short Term?

When buying property, most people buy it to remain in that home or building for a long time. They know the importance of buying what they like then. However, if you plan to buy and sell quickly, even within five years, you need to ensure the purchase price is affordable enough to handle any upgrades you put into it. Otherwise, you will not get the money you invest back when you sell the home at some time in the future. If you plan to stay long-term, it is a better to choose a location that is going to be large enough and flexible enough for your needs as they change.

Real estate investing is a big decision with long-term financial implications. Do not make that decision on your own. Before making any buying decision, talk to an agent about what your needs are. Find the right property and then take into consideration what it can offer you both in creating a home for your family and ensuring your financial future as well.