Tips for Investing in Real Estate

Beginning a hobby or career in real estate investing doesn't have
to be so complicated or such hard work if you will only begin
with what you have, right where you are at this moment.

Look for someone who really needs to sell their home and solve
their problem. One of the fastest solutions if they are about to
lose the house is to take over their payments on a subject-to
contract. By giving them some walking money, they can afford to
move and still have the cash to rent another home.

Then, clean up the property, lease it out to a future buyer on a
rent-to-own basis which is called a Lease/Option. You get to
collect an up-front, non-refundable deposit. Three to five
percent of the future purchase price is a good figure to shoot
for. You can actually do this every month and make some
additional cash, or concentrate on this method as a full time
lifestyle.

Have the renter/buyer sign a contract. You pocket the difference
between what you're paying the original owner and the amount
you're collecting from the new renter/buyer. The spread is higher
on nice, expensive homes in great neighborhoods, so don't be
afraid to search in these areas.

This is a good method of collecting extra cash flow every month.
There is no limit to the number of these deals you can do other
than your time and effort.

Call on every "For Rent" ad in the local paper and just ask if
they would be willing to sell the property in a couple of years
if you sign a long-term lease. If you get a yes, negotiate a fair
purchase price, sign a contract and find a renter/buyer. It
really is that simple. Of course, you want to have a lawyer check
out the contracts on the first deal to protect both parties.

Try to get at least $150 more per month than you are paying. Also
get a minimum of $1000 above and beyond what you have paid out as
the option deposit. You don't want to be working for free, do
you?

Let's look at some figures from actual lease/options. A couple
were behind on their notes because he lost his job, and she
didn't make enough to pay all the living expense. The stress was
causing marital problems and they wanted to sell, but the house
stayed on the market for six months with no takers.

They were getting desperate when a neighbor mentioned the
situation to her church group. One of the group's members had a
son who was looking for a house that could be leased with an
option to purchase in a few years. He and his wife didn't have a
lot of money for a down payment, but they knew that buying was
better than renting.

After looking at the property, they decided it would be a perfect
first home if they could manage the financing. The couple offered
$1000 as a non-refundable option deposit, if the current owners
would give them two years to qualify for a new mortgage. The
timing was right and the current owners accepted the offer. The
monthly payment they agreed on was $200 less than similar house
rentals in the area.

Both couples were happy and they signed contracts for the deal
the next day. The new couple didn't even move in. They saw an
opportunity to make some quick cash and a good monthly cash flow,
so they lease/optioned the house to another couple for $5000 down
with payments that were $300 above their obligation.

If this new couple closes on the deal in 1 year, they will have
earned $5,000 up front and $3,600 over the course of the year in
monthly cash flow. By the way, the sales price was $12,000 higher
than what they had agreed to pay the original owners. Added up
this equals $20,600 for just a few hours work.

These deals exist in every town in the world. You can do these
until you build up your bankroll and monthly cash flow. There are
no geographical limits. Travel the world doing deals, living
where you please and life is no longer on a budget.

About the Author

This article prepared by Real Estate Department of the http://www.AllAboutCalgary.com the biggest portal directory in Calgary, Alberta, Canada. Visit the Real Estate section at http://RealEstate.AllAboutCalgary.com for more information about Calgary Real Estates.

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Though you can save thousands by skipping the commissions of a realtor, you put yourself at a marketing disadvantage.

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