Why does one real estate investor go on to become a millionaire and another stay broke and in debt? Why does one investor always have the money to do the deals and another seemingly always treads on water? Why does one steadily move on up while another just moves on, or worse - just quits?
Without a doubt, some investors have tapped into the best-kept secret that will help you acquire the unlimited success and wealth you've always deserved. It's the secret that helped Donald Trump, Robert Kiyosaki, and Ross Perot build their real estate empires.
What is this secret?
Your wealth is limited only by your ability to borrow money. Yes - your ability to get into debt determines your ability to achieve wealth.
But debt is a complex concept. Not all of it is good -- a fact a surprising number of people fail to realize until they're in the hole -- and yet not all debt is bad. When used intelligently, the right type of debt can be of tremendous assistance in building your wealth.
The smart investors know the difference between good debt (investment debt) and bad debt (consumer debt). When you buy something that goes down in value immediately, that's bad debt. Buying a car on debt seems to be an inescapable part of life, but the car has no potential to increase in value and that's bad consumer debt.
Conversely, good debt is investment debt that creates value. For example, you find a good property that needs to be fixed up so you can resell it for a profit. You obtain a short-term loan from a Private Lender to buy the ugly house and fix it up quickly. This is definitely good debt.
Why?
Several months later, you sell the house, pay off the loan from the Private Lender, and you leave the title company with a five-figure check that represents your profit. No doubt, the best type of debt is debt that builds wealth over the long run, and the No. 1 example is debt for the purchase of real estate.
Imagine selling just two houses each and every month. And every time, you sell the house, your loan from your Private Lender is immediately paid off, and you walk away with a generous check.
This may sound like the stuff of fantasy to you, but successful real estate investors use investment debt to routinely achieve their financial goals. These same investors usually buy their properties with no money down. No money down does not mean that no money is involved in the transaction. The goal is to use none of your own cash and that's precisely what seasoned investors accomplish with short-term investment debt.
Most new investors believe that their lack of money is what stops them from doing a deal. Although this is not true, it does keep some investors from launching their business and realizing their goals.
Do not let your lack of money, bad credit, or no credit keep you from building your fortune in real estate. Sure, it takes more than money. Succeeding as an investor also requires time and effort. But you must supply the time and effort when you're just getting started. But what about the money to do the deals? Well, it doesn't have to be your own.
I have purchased over 200 properties in 4 years. Not only did I borrow the money from Private Lenders to buy the properties, I also borrowed the money to rehab the houses. My consistent use of short-term investment debt has helped me to get out of long-term financial bondage.
So how you find the Private Lenders?
You start by reviewing your current relationships. Do you know any real estate agents? Some realtors that specialize in foreclosures can be excellent sources regarding Private Lenders. How about someone that works at a title company? If you have previously bought a home, you can contact the escrow officer that helped you with the closing on your home. Here are some more possibilities.
■ Attorneys
■ CPAs
■ Insurance Agents
■ Local Real Estate Investors Association
Once you get a referral from one of your valued connections, you'll meet with the Private Lender for a discussion about your real estate investing plan. Repeat the process with multiple Private Lenders and your investing business will seem to be on steroids. You will quickly be on your way to wealth.
Real estate investors cannot achieve real wealth without going into debt. And despite what you may have learned growing up or in school about never getting into debt, the more short-term investment debt you incur buying real estate, the more value you will create ? and the more rapidly you will create wealth.
You can actually borrow your way to wealth.
Lee Salinas, CPA, MBA became a corporate refugee when he was blind-sided by a layoff in 2002. But Lee discovered life outside the corporate rat-race when he became a real estate investor. In four years, Lee has purchased nearly 200 properties. Lee now provides coaching and mentoring to help others achieve their dreams at http://www.LeeSalinas.com Additionally, Lee has created a real estate business plan that helps investors get all the private money they need to fund their deals. The business plan is available at http://www.realestatebizplan.com |
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