One Rate Real Estate: Solid Investment Returns in a Shaky Housing Market
One rate real estate investing offers a fixed rate of return. This investment technique is a preferred choice for individuals seeking a guaranteed rate of return on investments. One rate real estate is perhaps one of the most solid techniques in an otherwise unpredictable market.
To be successful in one rate real estate, it is imperative to work with a professional rehabber with a solid track record in flipping houses. House flipping used to be a popular and profitable investment. Nearly everyone was buying cheap homes with plans to fix them up and reap massive profits.
Today, house flipping is still a viable option and can yield profits. You will obtain the best results by working with a rehabber who has a reliable team of contractors and adheres to schedules. The primary goal of house flipping is to buy it, fix it and quickly sell it for profit.
Some investors engage in wholesaling real estate. Investors purchase properties significantly under market value and resell the property in “as-is” condition for profit. Savvy investors purchase bank portfolios consisting of dozens of foreclosure homes. Since they are buying in bulk, they can purchase properties for pennies on the dollar. They then pass these savings along to individual buyers or investors.
The goal with one rate real estate investing is to purchase affordable houses that require the least amount of work and located in desirable neighborhoods. Many homeowners have been displaced due to foreclosure. These people need houses and generally make good tenants; particularly if they have school-aged children.
Families do not want to uproot children during their school years. If they have lost their home to foreclosure they will be unable to obtain financing for a few years. Look for properties that can be used as rent-to-own or consider offering seller carry back mortgages while tenants rebuild their credit.
One rate real estate deals can be designed to suit the needs of all parties involved. The private lender receives a monthly stipend until the property sells. This typically amounts to 1-percent of the mortgage loan. The loan is legally recorded through a promissory note which outlines details of the transaction.
It is best to provide a cash loan as opposed to obtaining bank financing. Although interest rates are at an all-time low, credit is hard to obtain and will cost additional money to finance the deal. Many lenders impose prepayment penalties, stipulating the property cannot be sold for a minimum of six months, or longer. Penalties can amount to thousands and cut into profits.
Most one rate real estate transactions last between three and six months. Once property is sold, the rehabber pays off the mortgage note. Investors can reinvest the money in another real estate deal or financial investment.
Professional rehabbers can flip dozens of houses per month. By connecting with a seasoned house flipper, investors can earn $10,000 to $20,000 per deal. That is a good return on investment for doing nothing more than providing cash.
Simon Volkov is a private investor who specializes in investments. Simon buys and sells foreclosure homes, bank owned properties, probate real estate and short sale homes in southern California. His website offers information and resources on a wide range of real estate investment opportunities. Learn more at . Article Source: