How to be successful with real estate.

Now that we have established the best way for everyone to bring income into their lives with minimal effort is through Real Estate, here are some secrets to becoming a millionaire faster and easier with this type of investment.

Getting into real estate has never been easier, sure property prices are at an all time high, (but with prices continually increasing, they always will be). It also important to note, thats one of the reasons property is such a good investment, it's always going up in value. Theres a saying “the best time to buy property is NOW” which I believe to be true.

Due to competition and the almost non existent amount of people not able to pay (defaulting) their home loans (mortgages), it has never been easier to get a home loan.

Today there is a mortgage to suit everyone.

Some people point out that like any market there are plateaus and even slumps, but that won't worry us too much because we (hopefully) won't be paying market value.

Right, to get your first property don't set your sights too high. I recommend buying your first house to live in yourself. It will affect you the same financially as letting the house and having tenants because you'd still have to pay rent yourself (tenants in your property, you somewhere else). Also by living in the house yourself you have time to fix things when they break and can even fix them yourself. You tenants won't be very understanding in something breaks and you take weeks to fix it. Rightly so, they are paying you for suppling the roof over their heads and the amenities that go with it.

With you own house you can take care of things in your own time, you are no doubt also better able to put up with an interim mess cause while you make improvements to the property.

To buy you house your going to need money. The great thing is (as I'm about to show you) you don't need much.

You can get a home loan or mortgage from various money lenders, mortgage brokers (a good place for first timers) and banks. They all generally require just three things: a deposit, a guarantee (something they can sell to get their money back if you fail to pay) and income.

The first thing you need is a deposit which often worries a lot of people. It shouldn't. The truth is you don't need very much and you can often get away without a deposit at all. Many countries now have 100% finance making it easier to get started

Should you require a deposit, you can actually get around this, you just need the right financial institution. Banks are usually set in their ways so a trip to a mortgage broker may improve your chances. You can also often save thousands with a mortgage broker and even get the same loan from your normal bank cheaper through them.

Let me explain what a deposit is not and what it is. It is not money you need before getting a mortgage. It is a percentage of equity that your bank require you to hold in the property before it will lend against it. Lets do this slowly:

Equity is the part of the house that is paid for. If you buy a house worth $100,000 and have a deposit of $20,000 cash, then you will have 20% equity (you can also say $20,000 equity). Here's the trick. If you don't have $20,000 deposit, all you need to do is buy that same $100,000 house for $80,000. Then when the transaction is finished, you will own $20,000 in equity, and the bank will be just as happy. After all it's the same thing.

Re-read that paragraph until you understand it if you're unsure.

Now we just have to find that $100,000 house for only $80,000. An impossible task? Quite the opposite. The are many people who really want to sell their house quickly. We call them motivated sellers. Motivated sellers are (for whatever reason) open to a offers because they want money quickly. There are other possibilities too. Some people want to save a Real Estate agents fee and so advertise the property themselves. It's very common for such people to have no idea of a properties worth. Often they think they are ripping you off because they paid a lot less for it 20 years ago and without professional advice they will sell it to you cheaply.

You may need to make a dozens of offers before someone accepts one, but making offer doesn't cost you anything. All you need to do is spend a bit of time looking, don't be afraid to tell a Real Estate agent your plan. They will look on your behalf. Once you find a motivated seller willing to sell you a house below market value, all you need to do is get a professional valuation which confirms this and take that to the bank. Explain that you plan to use the equity as the deposit.

The second thank banks require is easy, security. You can use the house you are about to buy as the guarantee for the mortgage. Houses are in fact financial institution favourite for of security.

The last thing you will need is income. If you have a job you're on your way. But this site is about not working, what then?

The most important thing is to present a good looking (one which makes you allot of money and doesn't involve risk) plan to your lending institution. Then you will get your loan approved easily. Banks want to lend money, the only time they won't is if there is too much risk.

Don't be disheartened if in the beginning you get a few people who say no to your loan application. Always remember you can go to a different bank every day of the week and you can re-visit them as your financial plan improves to see if they will change their minds. It cost you nothing to ask.

To make the right kind of plan you need to show it will make you a good amount of profit on paper. If you don't have 'income' in the conventional sense, you need to do is find a property that is undervalued enough so you can borrow more than you need to purchase the property. The rest you can use to meet the loan repayments. In the previous example if the bank only wants to see 10% equity, you can borrow $90,000 against the house (which is only costing you $80,000). That's $10,000 to live off and pay the mortgage for a while.

Granted its not much. But its a start and theres nothing to stop you immediately doing it again.

My example above used $100,000 because its an easy figure to relate too. The reality is that property can cost quite a bit more, bit that just means greater profit (if the percentages are the same).

It is possible to buy a house without income, with no money down and quit work for good.

To be successful in property you must:

1. Do you homework and look at a number of houses, making low offers on some of them.

2. Look for untapped potential in a property, i.e. one that will increase greatly when a little work is done.

3. Make sure it puts money in your pocket immediately. E.g. Buy and undervalued property and immediately increase the mortgage to give you money, then your on you way to never working again.

4. Visit a number banks and mortgage brokers to find the most helpful one for you. You can be honest about your plans with these people because they make their money by helping you.

Go out and do some house hunting today. You'll need to see many diffferent houses before you find the one that puts the money in your pocket.

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