Traditional ways of making money in real estate consist of buying a property and holding it while it appreciates to make a long term profit.Why this way is good for some and not so good for others is if you own the property, you are in effect becoming a landlord,that is assuming you can get tenants into the property to rent the house and make the mortgage payments on the property to produce a positive cash flow.

When you do become a landlord of a property,you assume all the responsibilities associated with keeping the property maintained so it remains habitable for the tenants that are occupying the property.

For example, the plumbing,the wiring,heat,gas,water and the structural integrity of the property are all the landlords responsibilities.
As a landlord, you also assume certain risks and headaches such as the tenant not paying the rent, eviction proceeedings, lawyers fees, ect.

Now, what if there was a way for you to make money in real estate without any cash, credit or risk? Above, I mentioned you can make money in real estate by owning a property. I am now going to talk about controlling a property. This entails signing a purchase agreement with the seller for a specified amount of time,where you can assign the purchase agreement to an investor and collect an assignment fee.

When you do sign a purchase agreement with a seller, lets say for 90 days, the seller can not sell the property to anyone else during this 90 day period. In effect, you are controlling the property for 90 days or until you find an investor to assign the agreement to. The investor then buys the property from the seller and you collect an assignment fee, usually this is 5% of the sale price of the property.

What if you cant find an investor to assign the purchase agreement to
within 90 days? A Purchase agreement is a contract, in a contract there are allowable escape clauses that can be written into a contract to make it binding on the parties involved. Sometimes a seller will not want to make an agreement with you because of the escape clauses that are in the contract. Its common practice to leave an earnest money deposit with the seller, this can be $10 -$50, a small amount. This will make the seller feel comfortable with you.

Another agreement that can be made with a seller of a property is called a Purchase Option Agreement. It is much like a purchase agreement but a little more flexible for the potential buyer.

You assume no risk of buying the property from the seller with a purchase option agreement. If you can not find an investor to assign the purchase option agreement to within the specified period of time, the option expires. The purchase option agreement is just an option, not an obligation to purchase the property. In this agreement as in the purchase agreement, you are controlling the property for the specified amount of time and the seller can not offer it to anyone else.

Lets say the purchase option agreement you have signed with the seller is for 60 days. You now have 60 days to find an investor to assign the contract to and collect an assignment fee. You will need to do your due diligence on the property. This means checking the property for any outstanding liens or judgments against the title of the property. You need to know that the property is insurable.You can not obtain a mortgage if the property can not be insured.That is the law. You will need to have the property inspected as mentioned above,by a licensed inspector in your county of your state.

Great bargains can be found on properties that need to be rehabbed.
Lets say the comparable prices of houses in the area is $220,000
The owner has been living in the house for 20 years, which means there is equity in the property. Equity is always a good thing.There are ways to leverage the equity of a property in such a manner as to buy the property with no money down. Upon your inspecting the property, you see some structural damage, plumbing problems, boiler is old and needs to be replaced, walls are dirty, floors are cracked, ect. You then get free estimates from licensed contractors on how much it would cost to repair these problems. Always get a licensed contractor that can guarantee the work. Ask for references.

Keep in mind,you assume no risk in rehabbing the house when you use a purchase option or purchase agreement as you will be assigning the purchase option or purchase agreement to an investor from whom you will receive an assignment fee. With a purchase option agreement, you receive your assignment fee right away, regardless of whether the investor purchases the property or not. In a purchase agreement, you will be paid your assignment fee at the closing of the deal.

Above, I mention purchasing properties from FSBO'S which means For Sale By Owners. These are owners who are listing there properties themselves or threw a realtor. If you buy a property threw a realtor,there is a 6% commission fee of the purchase price of the house that must be paid for by the seller.

Other great bargains can be had with pre-foreclosure or houses in foreclosure.There are many creative real estate techniques to help the homeowner stop foreclosure, save his or her credit and also keep the homeowner in the home with creative financing.

Another method of making money in real estate is called a Short Sale.
The property is going to be foreclosed.When it is foreclosed it will go to auction and be sold to the higest bidder. Bank foreclosed properties offer the investor a great opportunity to make a nice profit. Banks are in business to make money. When a bank has a property that is about to go to auction, they stand to lose money. This is where the savvy investor steps in and offers to take the said property off the banks hands at a large discount. You can learn more about this below.

I am not a real estate investor at this time. I am writing what I have learned from a real estate course that in my opinion,is the best anywhere. Some of the teachings in this course can not be found in the $4000 real estate boot camps that a lot of people attend. At $29, this course is a must have for anyone wanting to learn how to profit in real estate without cash, credit, or risk. If you want to really learn to profit in real estate with no cash, credit or risk, I strongly suggest you examine this package. The Find and Assign method is the most safest and fastest way to profit in real estate.

copyright - 2007

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