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How To Buy Real Estate – Yes, YOU CAN!

If you want to buy a home but don’t think you can for any of the following reasons, this article is meant to give you the right information so you can make smarter decisions and open up to a world of wealth, possibility, and realism. Expectations.

The truth is, you are not being realistic when you think the following reasons are true:

I can’t buy a property right now because …

  • I don’t have 20% for the down payment, let alone 5%, let alone 1%.
  • I don’t have money for closing costs.
  • I will not qualify for a loan (I have bad credit, I am not making enough money, I cannot prove my income, I have not been in the same job long enough, etc.)
  • Market prices are too high now.
  • I don’t want to live in a bad neighborhood and that’s the only place I can afford one right now.
  • I cannot afford the mortgage payments on my current income.
  • Fill in the blank.

I’m here to tell you that you CAN buy a property, regardless of the above.

In this day and age, there is absolutely NO reason why someone can’t own their own home. Gone are the strict days of 20% off loans, excellent credit, and stable and well-paying, replaced by loan programs with no down payment before bankruptcy and declared income.

With today’s wide range of diverse lifestyles comes a wealth of opportunities and programs created for each and every possible situation. Businesses need to make money and the best way to open up to a wider range of customers is to offer services for the wide and varied circumstances of each individual.

Today, many lenders offer little or no down payment program, poor credit loans, and even no proof of employment or salary requirements (in the language of lenders, these are called “declared income programs” where you simply declare your income to the lender without having to prove it with pay stubs, W2, etc. This is widely used by freelancers and consultants).

In addition to the myriad programs offered by lenders, there are now government grants and services (often free) available to low-income and reserved homebuyers, as well as many first-time homebuyer programs. Government programs and many private loan programs also offer closing cost assistance (the costs required up-front to pay the lender’s fees, warranty and title charges, etc.), and some programs require the seller to pay the most of them.

For a list of government grants, visit http://www.cfda.gov (The Federal Domestic Assistance Catalog) or http://www.firstgov.gov (the official U.S. government website). .). Click on “Benefits and Grants” to access your grants page.

“Well that’s great,” you’re thinking, “but the housing market is so inflated right now, even if might qualify for a loan, how am I going to pay for a home in the neighborhood I want? “

Welcome to the wonderful world of foreclosures, tax auctions, and rehab (also known as remedial)! It is a myth that all foreclosures and delinquent properties are in poor and run-down neighborhoods. One good thing about foreclosures and delinquent properties is their indiscrimination. They occur in gang-filled crack neighborhoods, middle-class neighborhoods, and elite millionaire communities alike.

Another benefit is that they are generally much cheaper than the lowest priced home in the same neighborhood. We all know the difference between retail and wholesale. You could go to the mall and buy a shirt at retail for $ 20 or you could go to the garment district in town and buy the same shirt in bulk for $ 10, or better yet, with the advent of the internet, you could do All your wholesale purchases online in the comfort of your pajamas.

The same goes for real estate. If you wouldn’t spend that extra $ 10 to buy a retail shirt, why would you spend an extra $ 10,000 (or usually more) to buy a retail home?

In the industry, houses that are listed on the market are considered retailers. Homes you find through foreclosures and tax auctions are considered wholesale. These are discount homes, available cheaply for a quick sale, usually because the bank or county is simply looking to recoup the money they spent on them before (and after) the buyer defaults. This equates to great savings for the informed buyer.

Rehabilitation is buying houses that are a little less than perfect and fixing them up, either to sell for profit or to keep as a residence. Some people enjoy the challenge of buying a property that needs a complete overhaul (new roof, extensive remodel, structural fixes, etc.) while others prefer a “cosmetic fixer,” a home that needs a little touch-up paint here and there. , some flowers planted in the yard, maybe even a new kitchen counter, etc.

Cosmetic fixatives are a fun and easy way to earn money. You can do some art work (even if you’ve never done it before) and earn money at the same time. The quick wins you make can be rolled over to a bigger and better home, you can repeat the process over and over again, going from a $ 50,000 home to a $ 500,000 home in a few years, and the best part, it’s all! tax free!

Called the “1031 Exchange,” the proceeds you receive from the sale of the home may be tax deferred as long as you continue to purchase a home priced the same or higher with the proceeds you earn from the sale. Unlike the direct sale of a residence, there are no occupancy requirements or residence time restrictions for a 1031 exchange. For a residence, federal law states that you must live in the home for 2 out of every 5 years of ownership to avoid capital gains tax. You can choose to live in it for 2 years and deposit the earnings, yes, tax free! – or you can choose to flip it over and do a 1031 Exchange – yes, tax deferred!

If you’re sitting around scratching your head, thinking this all seems like too much work when all you want is simply a home to call your own, chances are you can still find a great deal on the retail market.

If you’re convinced, or even a little convinced, that you might be able to buy a home after all, here are some steps for the average traditional home buyer.

  • The first step is to find out how much you are willing to spend. Get your finances in order by evaluating your current total monthly income against your current total monthly expense. If you are paying $ 800 in rent now, how much more can you afford per month? If you don’t want to pay more than $ 800 a month, but you really can, I urge you to look at the big picture. Is it worth spending a little more per month now to ensure you have an investment that could generate significant returns for you a few years later? Is it worth investing that $ 800 a month (and a little more if necessary) in YOUR future prosperity and not the owner’s? Is it worth living without Direct TV or 100 cable channels or 3,000 cell phone minutes in the short term to invest in your long-term financial freedom? However, be careful not to overstretch. You still want to enjoy your home without cursing you for breaking your bank. Depending on your financial situation, it may not be necessary to cut costs or stretch to buy a home, but if so, how much is owning your own home worth to you?
  • The second step is to find the right lender or broker. You need to find a lender / broker to find out how much home you can afford. They will tell you how big the loan you qualify for, based on your income vs. your debt (debt-to-income ratio), approximately how much your monthly payments will be, and how much your startup costs will be, if applicable.
  • Once you find the right lender, the third step is to find an agent. As a buyer, you don’t pay an agent. The agent gets a commission from the seller’s final price. The commission (usually 6%) is divided between the buyer’s agent and the seller’s agent (and their broker). If you can, be your own agent. If you find a home you like on your own, you can often offer the seller a lower price, as they won’t have to pay agents some of it and can afford to lower the price for you. Sellers often take agent commissions into account when setting the sales price.
  • The fourth step is to know the market. Knowing what to buy, when to buy and where to buy is key to making money in real estate. Watch the market, talk to agents, sellers, buyers, investors, anyone who knows the neighborhoods that interest you. Be open to neighborhoods you haven’t thought of or heard of. Your agent can help you with this too. If you have found a good agent, they will share their knowledge of the market with you based on their experiences of being in it every day.
  • Know what you want and why. There are numerous ways to earn money in real estate. They range from simply buying low and selling high, to rental rental properties, buying notes and certificates, the ways mentioned above, and more. Do you want to make a million quick and instant? Or do you want a modest but steady stream of income to keep you comfortable? Or do you just want to buy a house to live in, a house in which your children can grow up? Study your options and choose the one that appeals to you the most, regardless of whether you know anything about it and whether or not you think you can. Find your niche in the market and follow it.
  • Learn from others who have. If your knowledge is insufficient due to lack of experience, let someone else’s experiences guide you. Take courses, read books, talk to other people who have set the path for you and have achieved success in what you want to do. Don’t listen to anyone who hasn’t done it themselves, especially those who tell you that you can’t. “Borrow” someone else’s knowledge until you earn yours through experience. There are many materials available to get you started.

Above all, the BEST thing you can do for your success is to believe in yourself, believe that it CAN be done and go out and do it. Stop wasting your time making excuses why it CANNOT be done and start spending your time more effectively looking for ways it CAN BE.

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