The All-Money-Down Technique
Just how does the all-money-down technique work by purchasing a home with cash? To begin with, let me repeat that I really didn't have any cash, but I had a substantial amount of equity from Terry's home and several homes that I owned come up with to give me a substantial cash deposit. Banks and mortgage companies alike encourage money from the home-equity line of credit as cash to get a home. At least they did in 1997 under the financial guidelines of your day. What you must remember about mortgages and lending is that the guidelines change constantly, so this technique I found in 1997 may or may not be able to be used in the future. Whether san diego realtor or neglects to be utilized again doesn't really matter if you ask me as I believe that there will always be a way to buy property with limited money down ultimately. There will always be a technique to acquire real estate but just how that will be done in the future I'm not completely sure.
I began purchasing homes in the Mayfair section of Philadelphia with the costs in the $30,000 to $40,000 per home price range. I would buy a home with three bedrooms and one bathroom on the second floor with a kitchen, dining room, and family room on the initial floor and a basement. What we call a row home in Philadelphia would consist of a porch out front and a backyard the width of the home. Most row homes in Philadelphia are less than twenty-two feet wide. For those of you who are not from Philadelphia and can't picture just what a Philadelphia row home appears like, It is advisable to watch the movie Rocky. Twenty-two homes on each side of every block will really test thoroughly your ability to be a neighbor. Things that will most likely cause an argument together with your Philadelphia neighbors often stem from parking, noise your children make, where you leave your trash cans, parties, and the looks of your home.
In 1998 my girlfriend and I moved in together and to the suburbs of Philadelphia called Warminster. After living on a street in Tacony, much like Rocky did, I must say i looked forward to presenting space between my home and my next-door neighbor. I told Terry not to even think about talking with individuals who lived next door to us. I informed her if one of them comes over with a fruitcake I will go on it and punt it just like a football directly into their backyard. I believe I was experiencing Philadelphia row home syndrome. My new neighbors in Warminster ended up being wonderful people, but it took me eighteen months before I was ready to learn that.
And that means you just bought your row home for $35,000 in Mayfair, and after $2000 to summarize costs and $5000 in repair costs, you're a good tenant who wants to rent the home. After renting the home with a positive cash flow of $200 per month, you now have a superb debt of $42,000 on your home equity credit line that will have to be paid off. When purchasing the home, I did not get yourself a mortgage when i just purchased a house for cash as it is said in the business. All monies I spent on this house were spent from the home-equity line of credit.
The move now could be to repay your home-equity line of credit so that you can go repeat. We now visit a bank with your fixed-up property and tell the mortgage department that you want to do a cash-out refinancing of one's real estate investment. It can help to explain that a nearby you purchase your property in must have a wider selection of pricing because the neighborhood of Mayfair did in the mid-90s. The pricing of homes in Mayfair is fairly unusual as you would visit a $3000 difference in home values from one block to the next. This was important when doing a cash-out refinancing because it's pretty easy for the bank to note that I simply bought my property for $35,000 regardless of the fact that I did many repairs. I could justify the point that I've spent more income on my home to fix it up, and by putting a tenant in, it had been now a profitable piece of real estate from an investment standpoint.
If I was lucky like I was often over achieving this system of buying homes in Mayfair and the appraiser would use homes a block or two away and keep coming back having an appraisal of $45,000. In the past there have been programs allowing an investor to purchase a home for ten percent down or left in as equity performing a 90 percent cash out refinance giving me back roughly $40,500. Utilizing this technique allowed me to obtain back almost all of the money I put down on the property. I basically paid just $1,500 down because of this new home. Why did the mortgage companies and the appraisers keep giving me the numbers I needed? I assume since they wanted the business. I would only tell the lender I need this ahead in at $45,000 or I am just keeping it financed as is. They always appeared to give me what I needed within reason.
This whole process took three to four months during which time I might have saved several thousand dollars. Between the money I saved from my job and my investments and cash out refinancing, I had replenished most or all of my funds from my home-equity credit line that has been now almost back to zero to begin the process again. And that is exactly what I designed to do. I used this system to purchase four to six homes a year utilizing the same money to get home after home after home over and over again. The truth is, the technique is really a no-money down or little money down technique. At that time maybe I had $60,000 in available funds to use to buy homes off of my HELOC, so I would purchase a home and replenish the money. It was a terrific technique that has been legal, and I possibly could see my imagine being a property investor full-time coming to an eventual reality even though I wasn't there yet.
Through the years from 1995 to 2002, the real estate market in Philadelphia made gradual increases of maybe 6 percent as each year went on. I started to track my net worth that was completely equity, meaning I had no other forms of investments to look at when calculating my net worth. In most cases, the initial five years of my property career did not go well as a result of bad decisions I made purchasing buildings and the decline in the market. Furthermore, my insufficient knowledge and experience in repairs managed to get a rough. The second five years of my real estate career that I just finished explaining didn't make much money either. I supported myself primarily through my career as a salesman, but I possibly could definitely see the writing on the wall that later on real estate would be my full-time gig.
Realty Professionals of America
I own an office building that has a property company as a tenant called Realty Professionals of America. The business has a terrific plan in which a new agent receives 75 percent of the commission and the broker gets only 25 percent. Unless you know it, this is the pretty good deal, specifically for a new agent. The company offers a 5 percent sponsorship fee to the agent who sponsors them on every deal they do. In the event that you bring someone who is a realtor in to the company you have sponsored, the broker will pay you a 5 percent sponsorship from the broker's end so the new realtor you sponsored can still earn 75 percent commissions. In addition to the above, Realty Professionals of America offers to increase the realtor's commission by 5 percent after achieving cumulative commission benchmarks, up to a maximum of 90 percent. Once a commission benchmark is reached, an agent's commission rate is only decreased if commissions in the following year do not reach a lesser baseline amount. I currently keep 85 percent of most my deals' commissions; plus I receive sponsorship checks of 5 percent from the commissions that the agents I sponsored earn. If you'd like to find out more about being sponsored into Realty Professionals of America's wonderful plan, please call me directly at 267-988-2000.
Getting My PROPERTY License
One of the things that I did in the summer of 2005 after leaving my full-time job was to create plans to obtain my real estate license. Getting my property license was something I usually wished to do but never appeared to have the time to do it. I'm sure you've heard that excuse one thousand times. People always say that they're going to take action soon as they find the time to do it, but they never seem to discover the time, do they? I do not let myself make excuses for anything. So I've composed my mind before I ever left my full-time job that certain of the first things I would do was to obtain my property license. I enrolled in a school called the American PROPERTY Institute for a two-week full-time program to obtain my license to sell real estate in hawaii of Pennsylvania. Two terrific guys with an environment of experience taught the class, and I enjoyed enough time I spent there. Immediately after completing the course at the American PROPERTY Institute, I booked the next available day offered by the state to take hawaii exam. My teachers' advice to take the exam soon after the class ended up being an excellent suggestion. I passed the exam with flying colors and have used my license often since to buy real estate and reduce the expenses. If you're going to be considered a full-time real estate investor or perhaps a commercial real estate investor, then you almost have to get a license. While I understand a few people who don't believe this, I'm convinced it's the only way.
I done one deal at $3 million where the commission to the buyer's agent was $75,000. By the time my broker took a share, I walked with $63,000 commission on that deal alone. With the common cost per year to be an agent running about $1200 per year, that one deal alone would've paid for my property license for fifty-three years. Not to mention all the other fringe benefits like access the mls offered too many realtors in this country. While you can find other methods for getting usage of the multiple listing services or another program similar to it, a real estate license is a good way to go.
Some of the negatives I hear over and over again about having your real estate license is the proven fact that you will need to disclose you are realtor when buying a home if you're representing yourself. Maybe I'm missing something, but I don't see this as a poor at all. If you're skilled in the art of negotiation, it's yet another hurdle that you must deal with. I suppose you could result in a lawsuit in which a court of law could assume as you are realtor you have to know each one of these things. I don't spend my entire life worrying about the million ways I could be sued any more than I worry about getting hit by way of a car each and every time I cross the street.
The Addict
From his first investment property over 20 years ago to his relentless search for the next great deal every day, Falcone is a non-stop real estate investment machine!
Get Addicted
Sometimes addiction is a very positive thing. In this book Phil Falcone, the ultimate real estate addict, will highlight how exactly to achieve amazing success as a genuine estate investor:
� Delve into the details of actual deals he negotiated and learn why his methods were so effective
� Discover why his residential to commercial property strategy will generate ultimate wealth
� Understand how he used apparent liabilities (OCD, insomnia, and workaholic behavior) to help him achieve his goals
� Explore why he can't stop investing in property, and how you can begin controlling your personal financial destiny through real estate