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Real estate investment with no own money involve, no credit check, etc.. Is this true? |
I see a lot of advertisements on craigslist re: real estate investment with no credit check, no own money involve, etc.. Is there any truth in this? I would like to get involve in real estate investing hoping that it will be a pathway to financial freedom, but i have no money to invest. Baby S: Yes, YOU CAN invest in real estate WITHOUT your own money, as I'm pursuing this now as my new career. The thing you have to remember is that what you would be doing is dealing with those homeowners who have found themselves going through the 'foreclosure process'...meaning they have fallen about 3-4 months behind on their mortgage and their lender (Usually a bank) has started the 'foreclose' process. If you check your local paper, you'll see back in the "Real Estate" section, ads entitled "Notice of Default". This is a MANDATORY process all lenders must due. Once you've found a homeowner going through the foreclosure process, you then negotiate what is called a "Short Sale" with the lender. "Google" the term: "Real Estate + Short Sale" NOTE: INCLUDE THE " " Then go through the the first 3-4 URl's that are returned and you should then get the gest of what and how Short Sales work. Another way of investing in Real Estate is through a process called "Wholesaling"; How this works is you still find those homeowners who are going through the foreclose process, however, they're not as far along as those who would be candidates for a 'short sale'; You talk to the homeowners to find those who are MOTIVATED to sell NOW and thus, are open to taking a lower amount then what the house would typically sell for. You put the house under contract, which can honestly be done for less then $100 and then before you close on the property, find another investor who would be willing to buy the house from you, fix it up themselves and then resell it months later. Here is an example of how that would work: Homeowner needs to move NOW because of job promotion out of state, or even because of a 'divorce'. Does not have time to wait for house to sell under normal process. (Find realtor, do a 'open house', etc., etc.,) Needs to sell NOW and is willing to take any offer, just to get out from under the loan. House is appraised at say $500,000 Minus 70% of market value or $350,000 If house needs any repairs (Carpet, paint, ect., etc.,) minus those costs from 70% amount Factor in a wholesale profit of say $9,000 Now, your offer to the homeowner would be: $500,000 (Appraised Value) -70% or $350,000 - REPAIRS (example) $9,000 - Wholesale Profit (example) $7,500 Offer To Homeowner: $330,500 Homeowner accepts offer; During the 30 days or so it typically takes to 'close' on a loan, you find another investor, from ads like you've seen on craigslist.com, or from signs you may see in your area that say "We Buy Houses"; You provide the information on said home to investor. If the investor decides to buy the house, then you turn around and sell it for any price ABOVE the $330,500 you offered to the original home owner. So, imgaine if a house was appraised at $550,000. You picked it up from the owner for $330,500. If you then turn around and sell it to the investor for say $430,000; Even if the house had about $15,000 worth of repairs needed, the investor could still turn around, re-hab the house and sell it for the apparised values a few months later, thus allowing everyone in the transaction to walk away happy. * Homeowner is happy because the house sold Quickly and can now move on with whatever they want to do. * You: You walk away from the closing with $X,XXX.00 cash in hand. * Investor: Profits just as much as you did, if not more, but only AFTER they rehab house and sell it...heck, they might even KEEP the house, rent it out and have a POSITIVE CASH FLOW every month. Of course, there are other factors to take into consideration, but that is the general "Jist" how it works in Real Estate Investing. When you put a house under contract, this can actually be done for about $10 dollars! I highly recommend you check out the following website for more information and read some of the posts by other investors who ARE making money from this process. www.flippinghomes.com Once the page comes up, click on the link that says "FORUM" and feel free to read through any/all the posts from fellow investors so you can get a better understanding of how Real Estate Investing can be a ticket to financial freedom. Hope this helps? RME, Jr i also see on Craigslist.com a high red banner about being cautious of scams...of which i think this is one. if it was that easy ---everyone would do it and we would not have the real estate crisis that now exists. be careful and good luck :) there's always a catch or a snag. It is possible, but requires special conditions. It is virtually essential to have some money to start with -- maybe not a lot, but some. It's a scam. They're trying to sell you a Get Rich Quick "system". Run away. |
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