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There is the Easy Way and the Hard Way
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So Which Way Is For You?
If you are a busy professional interested in investing of any kind. This article is for you. If you are a person who has invested, with current active investments, or looking to invest in the future. Especially someone who has heard how Real Estate Investing is a great way to earn returns. When it comes to Real Estate, the problem is not always the how but how to find the time.
Putting yourself into the markets to try and find great deals takes time. Learning how to do it well takes more time. A considerable amount of money has to be spent on advertising, documents, and getting the houses ready to sell. Not to mention the cost of selling the property.
If it doesn’t sell right away, then there would be the cost of monthly expenses for things like property taxes, utilities, and any payments on the money borrowed to make the purchase. To limit your exposure and risk, you would be better off purchasing the house in a business name or a retirement fund account. That way, you have a form of protection if anyone was hurt or property was damaged at a property you own. So, how do you invest in Real Estate without owning the property and going through the business formation and day-to-day management?
You should work with active investors who already have the necessary systems and business models. If you get a dog, it doesn’t make you a dog trainer, if you buy a truck, it doesn’t make you a mechanic, and if you buy a property, it does not make you a successful investor. Honestly, finding a house is not easy but is possibly the most straightforward element. After an agreement is made with the person selling the home, the contract goes to the attorney, the title examiner, and the title company.
This takes the speed of the purchase out of your hands. From here, it could take weeks to close to take ownership. If the property needs any work after the closing with the attorney, it would be time to move on to managing the contractors. How many times have you worked as a general contractor? So, hiring one may go great…it may not. Having done this type of work for many years would help develop a natural feel for the work needing to be done and how to do it. Wouldn’t it?
Somewhere around this time, a second, third, and depending on the amount of work and how it goes, the fourth and fifth loan payment may be rolling around. If you were able to pay all cash for the house. Great, you can continue to pay all cash for the utilities and contractor costs.
When the work has been completed, and it is time to sell, guess what costs money. You can hire a Realtor and pay their commission fees. Realtors are great. They have friends and resources that they work with often. You can sell the house yourself. This creates the need for another business system. Someone has to make the ads, answer the phone, and do the background checks on the people wanting to buy. All the while, more payments are due.
If the work is completed and the house will be a rental. Landlording creates the need for yet another business.
The house is sold, or a tenant has moved in! All of the previous steps were taken for what? MONEY! How much money were you after in the first place? What return sounds good? Professional investors look for individuals who want to invest in Real Estate but do not want the headache of running a business. The investment funds could come from a person’s IRA account, money market account, or cash on hand.
The investor’s company will own the house. It will give you legal action to take ownership of the home if the company does not perform on your agreed terms. Many investors are down-to-earth people who love what they are doing in Real Estate. So, all of the headaches that come with the business are just part of the business for them.
When getting to know the person you want to work with. Creating the terms is easy because it’s like talking with a friend and not a large company with a cookie-cutter way of doing business. You could arrange to be paid monthly, bi-monthly, annually, or semi-annually. You could ask for your interest and principal back each payment or interest-only payments so that the bulk of your money continues to draw higher returns.
The way to invest in Real Estate without owning a property is by becoming a Private Lender. Let the people who do this stuff every day do it for you to make money too. You get profit, security, and clarity by working with someone you know, like, and trust.
So who do you know?
If you would like to learn more, please fill out the form below, and we are glad to send you a PDF on becoming a Hands-Off Investor in Real Estate. Don’t forget to sign up for our email list either; that way, you will know each time new information is available. Who knows, you just might find the financial spark you need that will change your investing future forever. If you have any questions or comments, you can leave them at the bottom of the page.