Thursday, September 6, 2007
Do you want to get involved in investing in real estate but don?t seem to have any extra money in the bank? This is a common problem, but what you may not realize, is that you can start investing with little or nothing in your bank account. Basically, if you own your own home, you can leverage this asset and find yourself investing in no time flat.
As long as you own your own home, pay your mortgage and have fairly descent credit, it will actually be easy to get started in real estate investing. There is most likely a pretty good amount of equality in your house. Even if you have only owned your house for a short time, you have been paying it off and it is most likely has been increasing in value. Just take a look at the balance of your mortgage and subtract it from its current value. Of course you may need to include a second mortgage or and other liens that may be on your property, but you should still have equality to work with. This is your green light to move forward into investing.
Here three ways to use the equity in your home to raise the capital for real estate investing.
1. Refinancing Your Home - You can refinance your house, get a better interest rate and also get some cash out from a refinance mortgage. You can use the cash to purchase an investment property outright, or you should at least have least enough money for a down payment of a property. Be sure to check with your lender or mortgage broker for any of the rules about cash-out refinancing. Keep in mind, a cash-out refinance mortgage may have higher interest rates than other types of mortgages.
2. Using a Home Equity Loan - A home equity loan uses the equity in your home as collateral, this would be a second mortgage to the one you already have. The mortgage amount is based on a percentage of the equity in your house. You may be able to borrow up to 100% of your homes value, but if you are getting a home equity loan on a second property, you may not be able to borrow as much. This type of loan allows you the option to pay the loan back early without penalty, just a nice little bonus.
3. Open a Home Equity Line of Credit - A home equity line of credit has a credit limit similar to a credit card. This is not much different from a home equity loan, the amount that you can borrow is based on your credit score and the amount of equity in your home. You can transfer funds from your home equity line of credit, or even write checks directly from the account. Interest rates are generally lower than cash-out refinance mortgages, and there are tax advantages as well. Another advantage is that you are only paying interest and making payments on the amount you owe at the time, not the entire amount of the loan. In the future, you may also be able to renegotiate for a higher credit line when the equity in your house increases, especially if you have made improvements to your house.
Real Estate Investing is not only for the rich. The average homeowner can get started in real estate investing even if you don't have a lot of money in the bank. You can use cash-out refinance mortgages, home equity loans, and home equity lines of credit to begin your journey as a real estate investor, and continue to build more investments into the future.
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Mortgage Pre-Approval
So, you have decided to purchase a home and you are looking to ease the process as much as possible. This is a natural desire as the process of purchasing a home can be quite complicated and time consuming. One of the easiest ways to streamline the process of purchasing a home is to get pre-approved for your mortgage. Ensuring that this element is taken care of can help to decide the home you are able to purchase. The pre-approval lets you know your fiscal limitations before you begin the search process.
Be careful when talking to your financial institution as there are a few different kinds of approvals that banks will do. The first is what is known as a quick assessment. This is simply a general estimate of the amount that you "qualify" for. This is not, however the amount that you will definitely get. The quick assessment considers factors such as your down payment amount and credit history. The second kind of approval is the one that you are looking for, the complete pre-approval. This approval takes a much more focused look at your financial standing. It will define exactly how much money is available to you for a mortgage. As you can imagine this has a huge impact on your shopping process.
It is a truth of the real estate world that a buyer with a pre-approved mortgage will hold consideration over one who does not. This is another excellent reason to have the pre-approval. What if there are competing offers on the home? If you have the pre-approval and the other potential buyer does not, your offer will hold more weight. Sellers are always interested in having their home close quickly and without stress, the pre-approval is your assurance to them that this will indeed happen. With your approval in hand you can shop for a home with confidence and financial security.
M. Shane is a member of the REW Writers Team. A collective publication network facilitated by Real Estate Webmasters. Each article is contributed by a member of our real estate community. This particular article was submitted on behalf of HomesByLender.com, your source for FSBO homes.
Personal Realtor Maketing Systems Make Good Business Systems
A Personal Realtor Marketing system can provide the ultimate
method for listing properties. Like farming expired
listings, for example. If you can mail letters you can get
listings!
Many agents know about expired listings and how profitable
marketing them can be, but opt not to pursue them. I'm not
sure why, but there inaction can definitely be your gain!
It's not rocket science, but before you get too excited be
forewarned that not just any old expired real estate listing
letter will do. Effective ones must have enough information
on them to get the most desirable response; a phone call or
email message to you.
But if you're going for the ultimate most wanted response,
an actual listing, your letter must be outstanding. Hint! A
FREE cookie cutter letter won't cut the mustard if you are
competing for a $300,000.00 listing.
Fortunately, there are some pretty good ones available to
choose from at reasonable cost. But if you're bound and
determined to create your own then have at it.
However, the going will probably be slow and you'll lose
valuable time and customers to competitors while refining
it; neither of which you can afford.
There's another big upside to marketing with pre written
letters; they're time tested and can be effective in any
state, county, or city in the United States.
Effective ones can generate a steady stream of warm,
responsive prospects month after month; all interested in
one thing, listing and selling their properties. It doesn't
get any better than that!
Some letter writing come with complementary letters. If you
like the idea of repeat mailings go with a letter series,
but if you're not interested in repeat contacts go with the
single letter approach. Either way can be effective and
there are pros and cons to both, but ultimately the choice
comes down to your personal preference.
Your expired listing letter should at a minimum have your
full name, address, and phone number(s), and other contact
information. It should be as grammatically correct as
possible without sounding unnatural and spell checked to be
free of misspelled words.
Your letter should also have lots of white space. What I
mean is don't have run on sentences in paragraphs seemingly
without end. Instead, have short, 2-3 sentenced paragraphs.
For example, every paragraph on this page, excepting this
one, is 3 sentences or less. Also, use bullets whenever
possible to break your sales message to help your reader
better comprehend it.
Let's face it - you need listings. The more you have the
more money you'll make. On the other hand the fewer you have
the shorter your real estate career is likely to be.
A good real estate marketing system, with expired listing
letters, can help you get listings - period!
If you're a new agent it can help you get off to a good
start. You'll end up contacting a lot of "known" sellers in
a relatively short period of time.
And if you've been licensed for a while, but don't have the
volume of business that you want a real estate listing
campaign can supercharge your marketing results.
It's all about contacts. The more people you market your
services to the sooner you'll get to the people that you can
"close".
Imagine your many listing signs dotted throughout your
community. Now, create a plan to make it happen. They will
give you instant credibility and help you generate even more
listings and make more sales.
Everybody likes doing business with a winner and a good real
estate listing campaign can help make you one.
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