The Real Estate Information Center: Real Estate Insider Secrets Revealed! The Ultimate Source for Real Estate Insider Secrets on the W.W.Web! Money Saving Strategies, Avoid mistakes and stress, Choose the right agent."Excellent Real Estate Insider Secrets!"
The Real Estate Information Center is divided into three sections. Each section has the most current money saving and money making real estate insider secrets. The three sections are:
* First Time Buyer's Information - The real estate information you Must Know before buying.
* Experienced Buyer's Information - Real Estate information recommended for All Buyers including 1st time buyers.
* Investment Buyer's Information - Information on easy ways to Build Your Wealth through buying investment properties.
The Real Estate Information Center is your One Stop destination for real estate information and insider secrets on the Internet. It provides the most up to date buying strategies, tips, and secrets that you can use to make sure your real estate transactions are easier and more profitable. Why should you have to sift through a gazillion megabytes of information and spend hours of search time looking for real estate information on the Internet when you can find it all here in one site?
"The Real Estate Information Center can show you how to save thousands of dollars on your next real estate transaction!" In it you will find out...
1. Tips on how your mortgage lender can enable you negotiate a lower sales price on the house you buy. Every time!
2. How to get a seller to negotiate a lower price, even after they have given you their rock bottom selling price.
3. The best way to protect yourself from hidden damage and defects.
How to quickly determine the value of any income producing investment property in any market.
4. The number one mistake buyers make when purchasing real estate, and much, much more...
Thursday, May 22, 2008
Real Estate ABC - Information on Buying and Selling A Home
Interest Rate Report
Looks like the tulips aren't the only things rising as spring gets into full swing. March finished with mortgage interest rates hanging steady at 5.97, up just a bit from February's 5.92 rate. With rising oil prices, food costs and increases on everything else under the sun except consumer confidence, we'll see how long that trend lasts.
May Real Estate Report
Even though the sales pace is still dramatically behind last year's, two out of the four regions experienced increased sales in March. This time, both the Northeast and the West enjoyed sales increases of 2.2 percent. The Northeast region also maintained its position as the only region that had higher median sales prices compared to a year ago. To get all of the facts and figures for the month of March, 2008, read the full Existing Home Sales Report.
Tips for First Time Home Buyers
Buying a home can be a long, complicated and frightening process, and it is important to be prepared. Knowledge is power when it comes to negotiating the difficult world of home prices, interest rates and mortgage loans. For a first time home buyer, the more information you can gather before you start shopping, the better off you will be.
Preforeclosure flipping: The key to real estate riches
Buying, renovating, and selling an investment property is a sure-fire way to get rich quick. That's what mainstream America is led to believe, anyway, with the major surge in home improvement programming over the past several years.
Let's get one thing straight: It's not as easy as it looks on television.
However, it is possible to make a nice profit investing in real estate if you know where to begin. A smart and relatively safe way to get your feet wet is in the preforeclosure market.
The Home Inspection
When you buy a home, sure, you're going to look over the house yourself, as carefully and thoroughly as possible before making your offer, but...you're probably not an expert. The Home Inspector is the Expert.
Just to be clear, the inspector does not appraise the property, make guarantees about the structural viability and building codes, make recommendations on whether you should buy the house or not, or find hidden defects. The inspector will find visible problems that could be overlooked by a real estate agent, a buyer, or a seller - and that is why you need them.
Cleaning Up Your Credit
Mortgage lenders generally check with three credit bureaus in order to evaluate your past payment history. Your goal in cleaning up your credit report should be to clean up each of the three bureaus. If you only work on one, this does not effect the reporting to the other bureaus.
Assistance Programs for First Time Homebuyers
Although many people can afford a mortgage payment and associated costs to owning their own home, the thought of coming up with a substantial down payment often stops them from taking the plunge. Charity organizations and federal institutions are available to these buyers to assist with this problem.
When Your Home's Value is Less Than the Mortgage
With the real estate market cooling off some people are finding themselves in an awkward situation. For the first time in years the value of their home is less than what they owe on their mortgage. Several things have contributed to this. First, home prices aren't increasing like they were the last few years and in come cases have even dropped. Second, specialty loan products like option ARMs and interest only loans have made it easy people to buy more home than they can afford. There is a solution.
Ten Concerns Every Home Seller Should Pay Attention To
With the current real estate market such a competitive marketplace, how can you make your home stand out in an over-abundance of choices? Here are 10 easy to follow areas that every home seller should be concerned with before placing their home on the market. Increase your home's likeability factor to the point where you just may be catering to the highest bidder!
Looks like the tulips aren't the only things rising as spring gets into full swing. March finished with mortgage interest rates hanging steady at 5.97, up just a bit from February's 5.92 rate. With rising oil prices, food costs and increases on everything else under the sun except consumer confidence, we'll see how long that trend lasts.
May Real Estate Report
Even though the sales pace is still dramatically behind last year's, two out of the four regions experienced increased sales in March. This time, both the Northeast and the West enjoyed sales increases of 2.2 percent. The Northeast region also maintained its position as the only region that had higher median sales prices compared to a year ago. To get all of the facts and figures for the month of March, 2008, read the full Existing Home Sales Report.
Tips for First Time Home Buyers
Buying a home can be a long, complicated and frightening process, and it is important to be prepared. Knowledge is power when it comes to negotiating the difficult world of home prices, interest rates and mortgage loans. For a first time home buyer, the more information you can gather before you start shopping, the better off you will be.
Preforeclosure flipping: The key to real estate riches
Buying, renovating, and selling an investment property is a sure-fire way to get rich quick. That's what mainstream America is led to believe, anyway, with the major surge in home improvement programming over the past several years.
Let's get one thing straight: It's not as easy as it looks on television.
However, it is possible to make a nice profit investing in real estate if you know where to begin. A smart and relatively safe way to get your feet wet is in the preforeclosure market.
The Home Inspection
When you buy a home, sure, you're going to look over the house yourself, as carefully and thoroughly as possible before making your offer, but...you're probably not an expert. The Home Inspector is the Expert.
Just to be clear, the inspector does not appraise the property, make guarantees about the structural viability and building codes, make recommendations on whether you should buy the house or not, or find hidden defects. The inspector will find visible problems that could be overlooked by a real estate agent, a buyer, or a seller - and that is why you need them.
Cleaning Up Your Credit
Mortgage lenders generally check with three credit bureaus in order to evaluate your past payment history. Your goal in cleaning up your credit report should be to clean up each of the three bureaus. If you only work on one, this does not effect the reporting to the other bureaus.
Assistance Programs for First Time Homebuyers
Although many people can afford a mortgage payment and associated costs to owning their own home, the thought of coming up with a substantial down payment often stops them from taking the plunge. Charity organizations and federal institutions are available to these buyers to assist with this problem.
When Your Home's Value is Less Than the Mortgage
With the real estate market cooling off some people are finding themselves in an awkward situation. For the first time in years the value of their home is less than what they owe on their mortgage. Several things have contributed to this. First, home prices aren't increasing like they were the last few years and in come cases have even dropped. Second, specialty loan products like option ARMs and interest only loans have made it easy people to buy more home than they can afford. There is a solution.
Ten Concerns Every Home Seller Should Pay Attention To
With the current real estate market such a competitive marketplace, how can you make your home stand out in an over-abundance of choices? Here are 10 easy to follow areas that every home seller should be concerned with before placing their home on the market. Increase your home's likeability factor to the point where you just may be catering to the highest bidder!
Sunday, May 18, 2008
Zameen-Zaidad.com
Zameen-Zaidad.com is an internet domain engaged in real estate marketing for better and complete solutions for visitors, where buyers, sellers and brokers can exchange informations easily.
The company is engaged in sale, purchase and renting of properties through out India since 1987 and from January 2000 started marketing of well known builders.
Founder:
Zameen-Zaidad.com - An internet domain of Bhardwaj Buildtech (India) Pvt. Ltd. formerly known as Shri Aditya Estate.
Zameen-Zaidad.com is the biggest network of real estate agents in India and abroad for marketing of all real estate products and services.
Company is expanding its wings to all cities through making their channel partners, business associates and members. the company has already registered the members above ten thousands and counting is still going on.....
For more information mail to info@zameen-zaidad.com
The company is engaged in sale, purchase and renting of properties through out India since 1987 and from January 2000 started marketing of well known builders.
Founder:
Zameen-Zaidad.com - An internet domain of Bhardwaj Buildtech (India) Pvt. Ltd. formerly known as Shri Aditya Estate.
Zameen-Zaidad.com is the biggest network of real estate agents in India and abroad for marketing of all real estate products and services.
Company is expanding its wings to all cities through making their channel partners, business associates and members. the company has already registered the members above ten thousands and counting is still going on.....
For more information mail to info@zameen-zaidad.com
Tuesday, May 6, 2008
Don’t Let Passions Rule When Buying A Business
For many, the American dream of owning a business is in queue right behind owning a home. I was a teenager when I owned my first business. Since then I have bought or started many businesses and helped others do the same. Here are some common mistakes I have witnessed or committed myself.
Paying too much
This results from the combination of all other mistakes. Many new business owners set themselves up for failure by paying too much, which results in higher loan payments, lower operating funds, and reduced borrowing capacity.
Letting your emotions rule
If you have always dreamed of owning a business, it is very easy to get caught up in the strong emotions invoked by seeing those dreams coming true. To counteract your emotions, take your time, do your homework, and enlist the help of objective advisors.
Paying for potential
You should only pay for the business as it stands at the date of purchase, not what it could be in the future. You will have to spend time, effort, and money to develop its potential. The seller chose not to invest these things, so he does not deserve to be paid for them.
Not evaluating yourself
Do you have what it takes to run this business? Try to match your strengths to the important duties you will be required to perform. Running a small business requires the owner to do many things. No one can be good at them all, so make provisions for those areas in which you are the weakest. Some tasks like payroll and bookkeeping can easily be contracted to outside vendors. Possibly your spouse, other family member, or a partner could do things that you cannot or do not want to do.
Not building a team of experts
At a bare minimum, you should enlist the aid of an attorney and a CPA. The attorney can prepare and review documents, help structure the deal, and make you aware of legal and liability issues. The CPA can provide a financial analysis of the business, and advise you about tax and accounting matters. You should consider adding a business valuation professional. His valuation report can be used to determine the reasonableness of the asking price, negotiate a lower price, and provide valuable information about the business, the industry, the competition, and the economic conditions.
Relying on bad information
You should verify all important information about the business. Your CPA can check financial information like receivables, payables, and inventory. Your attorney can review loan documents, leases, and contracts. Your business valuation professional can analyze the competition, the industry, and the economic conditions. Use independent appraisers to value real estate and equipment. Get a credit report on the business through your CPA or banker. You can do some of the investigating yourself to save money, but do not cut too many corners – it may cost you in the long run.
Changing too much, too fast
Once you own the business, you will be tempted to start making wholesale changes from day one. You risk alienating long-time employees and customers. Unless the business is in bad financial condition and needs immediate action, its better to take some time to get to know the business, your employees, and your customers before making changes. This is a perfect time to solicit suggestions from employees and customers.
Buying a business because you like to do what the business does
One reason restaurants have a high failure rate is people buy or start them because they like to cook. Very few restaurant owners spend time cooking. Their time is spent managing staff, ordering supplies, doing paperwork, and handling daily crises. A small business owner must wear many hats – including that of manager.
Not being interested in the business’s product or service
I made the mistake of thinking that because I am a CPA and smart that I could own and operate any business. I bought a business that sold high-performance auto parts to young men who drove jacked-up, four-wheel drive pickup trucks and went to the drag races every weekend. I did not do either and never understood why anyone would. I could not relate to my customers and went out of business in about a year.
Conclusion
Buying a business is a complicated, emotional process. By avoiding these costly mistakes, you can prevent turning your dream into a nightmare
Paying too much
This results from the combination of all other mistakes. Many new business owners set themselves up for failure by paying too much, which results in higher loan payments, lower operating funds, and reduced borrowing capacity.
Letting your emotions rule
If you have always dreamed of owning a business, it is very easy to get caught up in the strong emotions invoked by seeing those dreams coming true. To counteract your emotions, take your time, do your homework, and enlist the help of objective advisors.
Paying for potential
You should only pay for the business as it stands at the date of purchase, not what it could be in the future. You will have to spend time, effort, and money to develop its potential. The seller chose not to invest these things, so he does not deserve to be paid for them.
Not evaluating yourself
Do you have what it takes to run this business? Try to match your strengths to the important duties you will be required to perform. Running a small business requires the owner to do many things. No one can be good at them all, so make provisions for those areas in which you are the weakest. Some tasks like payroll and bookkeeping can easily be contracted to outside vendors. Possibly your spouse, other family member, or a partner could do things that you cannot or do not want to do.
Not building a team of experts
At a bare minimum, you should enlist the aid of an attorney and a CPA. The attorney can prepare and review documents, help structure the deal, and make you aware of legal and liability issues. The CPA can provide a financial analysis of the business, and advise you about tax and accounting matters. You should consider adding a business valuation professional. His valuation report can be used to determine the reasonableness of the asking price, negotiate a lower price, and provide valuable information about the business, the industry, the competition, and the economic conditions.
Relying on bad information
You should verify all important information about the business. Your CPA can check financial information like receivables, payables, and inventory. Your attorney can review loan documents, leases, and contracts. Your business valuation professional can analyze the competition, the industry, and the economic conditions. Use independent appraisers to value real estate and equipment. Get a credit report on the business through your CPA or banker. You can do some of the investigating yourself to save money, but do not cut too many corners – it may cost you in the long run.
Changing too much, too fast
Once you own the business, you will be tempted to start making wholesale changes from day one. You risk alienating long-time employees and customers. Unless the business is in bad financial condition and needs immediate action, its better to take some time to get to know the business, your employees, and your customers before making changes. This is a perfect time to solicit suggestions from employees and customers.
Buying a business because you like to do what the business does
One reason restaurants have a high failure rate is people buy or start them because they like to cook. Very few restaurant owners spend time cooking. Their time is spent managing staff, ordering supplies, doing paperwork, and handling daily crises. A small business owner must wear many hats – including that of manager.
Not being interested in the business’s product or service
I made the mistake of thinking that because I am a CPA and smart that I could own and operate any business. I bought a business that sold high-performance auto parts to young men who drove jacked-up, four-wheel drive pickup trucks and went to the drag races every weekend. I did not do either and never understood why anyone would. I could not relate to my customers and went out of business in about a year.
Conclusion
Buying a business is a complicated, emotional process. By avoiding these costly mistakes, you can prevent turning your dream into a nightmare
Investing the profits from ur home based business
Having made the bold and glorious decision to sack the boss and go it alone you are one of the few who have what it takes to succeed. You have an entrepreneurial spirit and a strong will and these are rare and valuable attributes that will guide you throughout your professional and personal life.
Now that your business is up and running and you’re profiting from your efforts, it’s time to turn your attentions to investing the profits from your home based business wisely and for maximum gain.
One of the most consistently returning asset classes over the long term and the one that the majority of us can profit from is real estate.
Understanding market cycles
Now, you’re most likely aware that property markets are cyclical – this is because there is a direct correlation between the underlying price of real estate in relation to individual buying power. Simply explained: when property prices rise above what first time buyers can afford to pay the market slows down, stagnates and sometimes readjusts – but as soon as purchasing power increases again, either with a drop in interest rates or an increase in GDP, so property prices begin rising again.
And there are even ways to make money from real estate during a market downturn!
Investing in real estate for income
Depending on the nature of your home based business your monthly income may be slightly erratic – some months being better than others! If you invest in property assets in a buy-to-let or even jet-to-let capacity you can secure yourself a consistent monthly income which may afford you an added degree of financial security.
Buy-to-let is when you purchase property for rental purposes – this make be an apartment you corporate let, it could be a house you student let or even a family home you rent out long term.
Jet-to-let is similar but it involves purchasing overseas property for short term weekly or fortnightly rental to tourists. This type of letting is usually very lucrative indeed during peak holiday periods but may mean you have a property that is empty for a few months out of season.
Both types of property investment return you a regular income and at the same time the physical real estate asset will grow in value over the long term and if ever you wish to release the profits from your investment you can sell on the property and take the gains you have accrued.
Investing in real estate for profit
The alternative to building up a property portfolio for income generation purposes is purchasing property and selling it on relatively quickly to realize the gains the asset has accrued.
You can do this in a number of ways…firstly you can purchase run down property in need of renovation, tidy up the property and turn it into a home before selling it on at a higher price and reaping the profits gained.
Alternatively you could seek to beat the curve by buying into up and coming areas, waiting for prices to boom and then selling on for profit. This is quite a risky strategy for a first time investor as timing the market is hard!
An alternative to this is looking overseas for the latest emerging property markets worldwide and buying properties to renovate or properties off plan and then flipping them on for maximum gains in the short term.
Financing your investment
As a self-employed individual it can be tricky to get a mortgage unless you have audited accounts, bank references etc., etc. If you don’t have all of these requisite documents there are other options available to you.
The main options are re-mortgaging your primary residence and releasing the equity that you have accrued already for reinvestment in another property project or taking out a self-certification mortgage where you make a large down payment and basically tell the lender how much you can afford to borrow!
A winning attitude
You’ve already proved you have what it takes to succeed against the odds by establishing a profitable home based business, now apply the same steely determination to your real estate investments and you will succeed in making the maximum gains. Start small, begin gently, test the market and your understanding of it and slowly build up a profitable real estate portfolio from the profits of your home based business for maximum financial gain.
Good luck in achieving your goals
Now that your business is up and running and you’re profiting from your efforts, it’s time to turn your attentions to investing the profits from your home based business wisely and for maximum gain.
One of the most consistently returning asset classes over the long term and the one that the majority of us can profit from is real estate.
Understanding market cycles
Now, you’re most likely aware that property markets are cyclical – this is because there is a direct correlation between the underlying price of real estate in relation to individual buying power. Simply explained: when property prices rise above what first time buyers can afford to pay the market slows down, stagnates and sometimes readjusts – but as soon as purchasing power increases again, either with a drop in interest rates or an increase in GDP, so property prices begin rising again.
And there are even ways to make money from real estate during a market downturn!
Investing in real estate for income
Depending on the nature of your home based business your monthly income may be slightly erratic – some months being better than others! If you invest in property assets in a buy-to-let or even jet-to-let capacity you can secure yourself a consistent monthly income which may afford you an added degree of financial security.
Buy-to-let is when you purchase property for rental purposes – this make be an apartment you corporate let, it could be a house you student let or even a family home you rent out long term.
Jet-to-let is similar but it involves purchasing overseas property for short term weekly or fortnightly rental to tourists. This type of letting is usually very lucrative indeed during peak holiday periods but may mean you have a property that is empty for a few months out of season.
Both types of property investment return you a regular income and at the same time the physical real estate asset will grow in value over the long term and if ever you wish to release the profits from your investment you can sell on the property and take the gains you have accrued.
Investing in real estate for profit
The alternative to building up a property portfolio for income generation purposes is purchasing property and selling it on relatively quickly to realize the gains the asset has accrued.
You can do this in a number of ways…firstly you can purchase run down property in need of renovation, tidy up the property and turn it into a home before selling it on at a higher price and reaping the profits gained.
Alternatively you could seek to beat the curve by buying into up and coming areas, waiting for prices to boom and then selling on for profit. This is quite a risky strategy for a first time investor as timing the market is hard!
An alternative to this is looking overseas for the latest emerging property markets worldwide and buying properties to renovate or properties off plan and then flipping them on for maximum gains in the short term.
Financing your investment
As a self-employed individual it can be tricky to get a mortgage unless you have audited accounts, bank references etc., etc. If you don’t have all of these requisite documents there are other options available to you.
The main options are re-mortgaging your primary residence and releasing the equity that you have accrued already for reinvestment in another property project or taking out a self-certification mortgage where you make a large down payment and basically tell the lender how much you can afford to borrow!
A winning attitude
You’ve already proved you have what it takes to succeed against the odds by establishing a profitable home based business, now apply the same steely determination to your real estate investments and you will succeed in making the maximum gains. Start small, begin gently, test the market and your understanding of it and slowly build up a profitable real estate portfolio from the profits of your home based business for maximum financial gain.
Good luck in achieving your goals
Home based frachising
Is Home Based Franchising for you?
Do you desire Home Business Ownership but cringe at the thought of starting from scratch?
Possibly a Home based Franchise is your answer.
A Franchise is a business in which "... the franchisor, the owner and developer of the franchise system licenses [you] franchisees to use trademarks, service marks, logos, or advertising owned or developed by the franchisor." (International Franchising Association, Franchising basics).
With some franchise programs, the business operates using the Franchisor's brand name only.
Other programs are less restrictive and allow for the usage of both a trade name in addition to the franchisor's brand name.
Common to all franchise programs, the franchisee[ you] is responsible to pay the franchisor, advertising fees, initial fees, service fees, and or royalty fees.
You are responsible for payment whether your business is profitable or not.
Additionally, many franchisor's provide educational programs to franchisees before the inception of the business.
Often times, they've done demographic studies and other studies to ensure that you have greater odds of returning a profit.
Major Franchise Types
• Unit Franchising
Is the most simple type of franchise in which the Franchisor grants the franchisee the right to operate a single operation at a specified location or within a particular territory.
• Area Development Franchising
In accordance with a "development schedule", the franchisee agrees to establish a predetermined number of "unit franchises" within a particular territory.
• Subfranchising/Master franchizing
Is quite similar to Area Development Franchising with the major difference being that the franchisor grants the subfranchisor the option of opening the unit franchises herself or selling the the franchises to third parties. (Common with International franchising)
• Affiliate Franchising
This type of set up is typically used by an owner of an established business who decides to join/affiliate with a franchised chain.
This allows for the benefit of the franchises brand. This is common with many real estate.
• NonTraditional
This type of set up is customized between the franchisor and the franchisee.
Franchises are not the same as Dealerships and distributorships
A dealership or distributorship differs from a franchise in that there is no FEE involved. Dealers purchase products usually from the manufacturer at wholesale prices.
Note however, that a dealership can become a Franchise IF a FEE is paid to the franchisor AND the distributor is dependent upon the franchisor's pay structure.
Considerations when buying a franchise
• There's a benefit to purchasing a franchise that is well known
• Will the franchisor provide ongoing education and support?
• Were demographic studies performed?
• How many of the franchises have closed operation? Why?
• Have you STUDIED the franchiser's Comprehensive Disclosure Statement? It's required by Law that prospective Franchisee's are provided Comprehensive Disclosure, a copy of the franchisor's Standard Franchise Agreement, Audited statements, a list of the names of all of the Franchisees, as well as a copy of all documents that require the franchisees' signing.
By law, each of the above must be provided at least 2 weeks prior to purchase date.
• I've heard the saying, "if you buy a McDonald's, be prepared to eat burger's for breakfast lunch and dinner." In other words, your business requires commitment.
Additional Sources of information
•Success Magazine
•International Franchise Association www.franchise.org
•Franchise Sales Press *Get this magazine since it is known for its focus on franchise opportunities. Further, they perform regular interviews with both franchisees as well as with franchisors.
•SBA Small Business Association
•Brokerage firms and analysts Since stock information on A public company is useful.
•Franchise Lawyer •Federal Trade Commission Public Reference Branch
•UFOC "Uniform Franchise Offering circular -- the material that is provided by law, by the franchisor to the qualified franchisee. This is likely the most telling of all information gathered.
•Attorney General's Office
•BBB located in the city of the Franchisor's headquarters.
•Your Banker should have access to the Dunn and Bradstreet Report on the particular Franchisor.
•Contact the franchisor's franchisee's listed in UFOC. *** Prepare a list of relevant questions prior to calling.
Purchasing a franchise usually equates to a reduction in investment risks since the" system" and Franchise name is established, training and ongoing support is provided, market research has been conducted... Conversely…
franchise ownership can be costly. Consequently, it is critical that you investigate the franchise thoroughly prior to purchasing.
There is a continual rise in the number of franchises. Obviously, there's a HUGE market for this method of business ownership. When approached methodically and practically, Franchise ownership can be Very lucrative and much simpler than beginning a business from the ground up.
Be wise and ensure that you conduct sufficient research prior to committment.
If you’ll need financial backing, then you will need to create a business plan. There’s a handy Business Plan workbook available at our sit
Do you desire Home Business Ownership but cringe at the thought of starting from scratch?
Possibly a Home based Franchise is your answer.
A Franchise is a business in which "... the franchisor, the owner and developer of the franchise system licenses [you] franchisees to use trademarks, service marks, logos, or advertising owned or developed by the franchisor." (International Franchising Association, Franchising basics).
With some franchise programs, the business operates using the Franchisor's brand name only.
Other programs are less restrictive and allow for the usage of both a trade name in addition to the franchisor's brand name.
Common to all franchise programs, the franchisee[ you] is responsible to pay the franchisor, advertising fees, initial fees, service fees, and or royalty fees.
You are responsible for payment whether your business is profitable or not.
Additionally, many franchisor's provide educational programs to franchisees before the inception of the business.
Often times, they've done demographic studies and other studies to ensure that you have greater odds of returning a profit.
Major Franchise Types
• Unit Franchising
Is the most simple type of franchise in which the Franchisor grants the franchisee the right to operate a single operation at a specified location or within a particular territory.
• Area Development Franchising
In accordance with a "development schedule", the franchisee agrees to establish a predetermined number of "unit franchises" within a particular territory.
• Subfranchising/Master franchizing
Is quite similar to Area Development Franchising with the major difference being that the franchisor grants the subfranchisor the option of opening the unit franchises herself or selling the the franchises to third parties. (Common with International franchising)
• Affiliate Franchising
This type of set up is typically used by an owner of an established business who decides to join/affiliate with a franchised chain.
This allows for the benefit of the franchises brand. This is common with many real estate.
• NonTraditional
This type of set up is customized between the franchisor and the franchisee.
Franchises are not the same as Dealerships and distributorships
A dealership or distributorship differs from a franchise in that there is no FEE involved. Dealers purchase products usually from the manufacturer at wholesale prices.
Note however, that a dealership can become a Franchise IF a FEE is paid to the franchisor AND the distributor is dependent upon the franchisor's pay structure.
Considerations when buying a franchise
• There's a benefit to purchasing a franchise that is well known
• Will the franchisor provide ongoing education and support?
• Were demographic studies performed?
• How many of the franchises have closed operation? Why?
• Have you STUDIED the franchiser's Comprehensive Disclosure Statement? It's required by Law that prospective Franchisee's are provided Comprehensive Disclosure, a copy of the franchisor's Standard Franchise Agreement, Audited statements, a list of the names of all of the Franchisees, as well as a copy of all documents that require the franchisees' signing.
By law, each of the above must be provided at least 2 weeks prior to purchase date.
• I've heard the saying, "if you buy a McDonald's, be prepared to eat burger's for breakfast lunch and dinner." In other words, your business requires commitment.
Additional Sources of information
•Success Magazine
•International Franchise Association www.franchise.org
•Franchise Sales Press *Get this magazine since it is known for its focus on franchise opportunities. Further, they perform regular interviews with both franchisees as well as with franchisors.
•SBA Small Business Association
•Brokerage firms and analysts Since stock information on A public company is useful.
•Franchise Lawyer •Federal Trade Commission Public Reference Branch
•UFOC "Uniform Franchise Offering circular -- the material that is provided by law, by the franchisor to the qualified franchisee. This is likely the most telling of all information gathered.
•Attorney General's Office
•BBB located in the city of the Franchisor's headquarters.
•Your Banker should have access to the Dunn and Bradstreet Report on the particular Franchisor.
•Contact the franchisor's franchisee's listed in UFOC. *** Prepare a list of relevant questions prior to calling.
Purchasing a franchise usually equates to a reduction in investment risks since the" system" and Franchise name is established, training and ongoing support is provided, market research has been conducted... Conversely…
franchise ownership can be costly. Consequently, it is critical that you investigate the franchise thoroughly prior to purchasing.
There is a continual rise in the number of franchises. Obviously, there's a HUGE market for this method of business ownership. When approached methodically and practically, Franchise ownership can be Very lucrative and much simpler than beginning a business from the ground up.
Be wise and ensure that you conduct sufficient research prior to committment.
If you’ll need financial backing, then you will need to create a business plan. There’s a handy Business Plan workbook available at our sit
Building Wealth: Don't Waste Your Money on Real Estate Investment Schemes
You've seen the real estate guru advertisements for books, DVDs, programs, seminars, and mentoring coaches promoting no-money-down deals. Perhaps you've watched the infomercial on TV with the people telling their stories of how they made millions investing in real estate with no-money-down and cash back to the buyers.
Maybe you, like me and many others, have purchased books or expensive systems based on these no-money-down and lease-option investing schemes. Here's the rest of the story.
Perhaps you've seen an ad in your local newspaper offering a home with 100% financing from the seller or a lease option. You should know that the investor offering these types of deals makes money by purchasing the property at a discount and selling the property for an inflated price.
Lease-option real estate investors play the odds. They bet that most people won't be in a position to purchase the lease-option home in a year. So the investor seeks a hopeful tenant to make higher than average rental payments, pay more move-in cash, and make the investor's mortgage payment. Those tenants who do eventually purchase the home paid much more for the home than the investor. Many tenants never come up with a new mortgage loan to purchase the property when the time runs out. Either way, the real estate investor makes money.
First-Time Home Buyers
If you need to buy your first home to live in, these home-purchase methods may help you if you have terrible credit and can clean it up in time to finalize the purchase in a year. Just understand that you're paying too much for the property and may not make any money on appreciation. On the other hand, if you have strong credit, you can purchase a bargain house with no money down legitimately.
Tips for Beginning Real Estate Investors
Don't buy overpriced property! Avoid 100% investor-financed "deals." You will have to wait too long to make any money. Plus, the rental income most likely won't come close to making the mortgage payment for you.
Don't waste your money buying real estate guru books, DVDs, programs, seminars and mentor-coach promoting no-money-down deals. Would you buy a book on how to make a fortune on the Internet that was written in 1995?
These out-of-date, no-money down schemes, tell you to look for home sellers in distress who will let you buy their home for no-money down with the seller financing the property for you. This system worked last century. Today's home sellers know that they can get a buyer who can get their own financing.
Plus, today's home sellers know that other sellers have lost money selling with no-money down. They've heard the stories where home sellers didn't get paid and had to foreclose on a property. They've heard the stories where the investor-buyer rented the house to tenants who trashed the property. They've heard the stories where the investor-buyer collected the rent and didn't pay the home seller.
To get started building wealth in real estate today:
1. Get your credit ready for mortgage financing. (Mortgage credit differs from consumer credit.)
2. Buy right. Don't overpay for deals that sound too good to be true. These schemes are too good to be true!
3. Guard your money. Don't get yourself in over your head with high mortgages on rental properties that cause you negative cash flow and jeopardize your financial well-being. The best way to do this is to make sure you get the best mortgage rates on a bargain-priced property.
You can buy investment property for little -- or even no-money down. Get started by buying your home or a second home. Real estate investing offers you the most tried and true way to build wealth when you avoid investing schemes
Maybe you, like me and many others, have purchased books or expensive systems based on these no-money-down and lease-option investing schemes. Here's the rest of the story.
Perhaps you've seen an ad in your local newspaper offering a home with 100% financing from the seller or a lease option. You should know that the investor offering these types of deals makes money by purchasing the property at a discount and selling the property for an inflated price.
Lease-option real estate investors play the odds. They bet that most people won't be in a position to purchase the lease-option home in a year. So the investor seeks a hopeful tenant to make higher than average rental payments, pay more move-in cash, and make the investor's mortgage payment. Those tenants who do eventually purchase the home paid much more for the home than the investor. Many tenants never come up with a new mortgage loan to purchase the property when the time runs out. Either way, the real estate investor makes money.
First-Time Home Buyers
If you need to buy your first home to live in, these home-purchase methods may help you if you have terrible credit and can clean it up in time to finalize the purchase in a year. Just understand that you're paying too much for the property and may not make any money on appreciation. On the other hand, if you have strong credit, you can purchase a bargain house with no money down legitimately.
Tips for Beginning Real Estate Investors
Don't buy overpriced property! Avoid 100% investor-financed "deals." You will have to wait too long to make any money. Plus, the rental income most likely won't come close to making the mortgage payment for you.
Don't waste your money buying real estate guru books, DVDs, programs, seminars and mentor-coach promoting no-money-down deals. Would you buy a book on how to make a fortune on the Internet that was written in 1995?
These out-of-date, no-money down schemes, tell you to look for home sellers in distress who will let you buy their home for no-money down with the seller financing the property for you. This system worked last century. Today's home sellers know that they can get a buyer who can get their own financing.
Plus, today's home sellers know that other sellers have lost money selling with no-money down. They've heard the stories where home sellers didn't get paid and had to foreclose on a property. They've heard the stories where the investor-buyer rented the house to tenants who trashed the property. They've heard the stories where the investor-buyer collected the rent and didn't pay the home seller.
To get started building wealth in real estate today:
1. Get your credit ready for mortgage financing. (Mortgage credit differs from consumer credit.)
2. Buy right. Don't overpay for deals that sound too good to be true. These schemes are too good to be true!
3. Guard your money. Don't get yourself in over your head with high mortgages on rental properties that cause you negative cash flow and jeopardize your financial well-being. The best way to do this is to make sure you get the best mortgage rates on a bargain-priced property.
You can buy investment property for little -- or even no-money down. Get started by buying your home or a second home. Real estate investing offers you the most tried and true way to build wealth when you avoid investing schemes
Are You Wealthy Yet
Here's a real simple way to become wealthy.
Marty and his wife live at home with their 2 children. They own
a 3 bedroom house in a middle class neighborhood and try to live
within their means. Marty works full time in the Printing
Industry, while his wife is in charge of the home and looking
after the children.
They've accumulated some credit card debt and have 2 years left
on a car loan. They try to stay out of debt as much as possible
and together they've managed to contribute a total of $32,000 to
their own Retirement Fund. It is kept in term deposits receiving
5% interest annually.
Two years prior, the couple bought an older house that they
fixed-up and rent out for $850 a month. After paying the
mortgage and taxes $300 is left over each month. This goes into
their savings account each month.
At Christmas, the family bought themselves a new computer and
decided to start a home-based business. Things started out
fairly slowly but after 8 months they were receiving a steady
check of $400 a month which also goes into their savings
account. This part-time business will continue to grow with the
effort they dedicate to it.
This business also offers them some very lucrative tax savings.
By taking advantage of these Tax Strategies they are able to
save an additional $300 a month on tax that was normally
deducted from Marty's paycheck at work. This monthly income is
also added to the couple's savings.
Marty has just begun writing an E-book about his "production
expertise" at work. His plan is to market this book on the
internet for profit
Every Sunday the couple takes a drive to stay familiar with the
Real Estate market in their area. They're looking for another
property, a "handyman's special" to fix-up and rent out. They
have saved enough for a down payment and their credit with the
bank is well established.
The family's total monthly expenses are $2000. Now, here's the
question:
Does Marty's family have Wealth yet?
To answer this question properly you first have to understand
exactly what "wealth" means.You achieve wealth when: *Your
Passive Income is the same or greater than your Expenses.* So
what does this mean?
First, what is Passive Income?
Passive Income is money that you are paid over and over again
for work that you only do once. (This excludes using a gun or
finding cash on the street) Some examples of this would be
royalties for writing a book or a song, commissions that you
receive for sales that others make and interest from bank
savings or dividends on stocks/options that you own.
Second, what Expenses are we talking about? This one's a little
easier to understand. Expenses are the total amount it takes to
run your household and your life. This includes, rent, mortgage
payments, car insurance, food, credit card and loan payments,
etc………
Let's look at Marty's family a little closer…………. Does Marty
have any Passive Income? Yes he does. Marty's salary is not
considered Passive Income. That's because he has to work 40
hours a week just to get the basic amount. If Marty doesn't go
to work then he doesn't get paid. His overtime also doesn't
count as Passive Income.
The interest from their Retirement Fund does though. It's paid
to him month after month as long as it's left in that account.
So, $32,000 at 5% is $1600 a year. Divided by 12 months equals
$133 a month in interest. Ok…..what else?
After the mortgage and expenses are paid with the rent money
they receive on their rental property they are left with $300
every month. This is Passive Income. Just as long as the tenant
stays and pays his monthly rent.
How bout that $400 from the home-based business and the Tax
savings. Is this Passive Income? Well, Marty's wife made sure
that she chose a company where she could sign new business
accounts and get paid commissions on those accounts over and
over again. They've made a 5 year commitment to build this
business part-time. So yes, both the $400 and the $300 in Tax
Savings would apply as Passive Income. Let's add up Marty's
total Passive Income.
Interest $166.00 Rental Income $300.00 Home Based
Business$400.00 Tax Savings $300.00 Total $1166.00
Not including Marty's salary from work, his family's Passive
Income is $1166.00. Not bad. Every month this amount flows into
the family's bank account, regardless of anything else they do.
We said that Marty's monthly expenses total $2000.00 a month.
And we also said………… You have Wealth when: *Your Passive Income
is the same or greater than your Expenses.*
$2000 Expenses subtract $1166 Passive Income = $834 monthly
balance needed to have Wealth.
Marty's Expenses are still more than their Passive Income so
they're not wealthy just yet. But they're well over half-way
there. With this kind of knowledge a family can know exactly
where to focus their financial attention.
Maybe when Marty writes that ebook he could get some sales and
royalties from it. Also the new Real Estate and more work on
their Home-based business would certainly help them to attain
more Passive Income. Once Marty's Passive Income is more than
the family's Expenses then Marty could start to have much more
freedom. He may even choose to quit his job and continue
developing his Passive Income streams.
Take a look at your own finances. What are your monthly
expenses? Do you have more Passive Income than your Expenses? If
you do Congratulations. You're Wealthy!!! If you don't. It's
time to get started and start adding Passive Income from other
areas as soon as possible.
When you truly understand this principle, you'll be well on your
way to becoming wealthy
Marty and his wife live at home with their 2 children. They own
a 3 bedroom house in a middle class neighborhood and try to live
within their means. Marty works full time in the Printing
Industry, while his wife is in charge of the home and looking
after the children.
They've accumulated some credit card debt and have 2 years left
on a car loan. They try to stay out of debt as much as possible
and together they've managed to contribute a total of $32,000 to
their own Retirement Fund. It is kept in term deposits receiving
5% interest annually.
Two years prior, the couple bought an older house that they
fixed-up and rent out for $850 a month. After paying the
mortgage and taxes $300 is left over each month. This goes into
their savings account each month.
At Christmas, the family bought themselves a new computer and
decided to start a home-based business. Things started out
fairly slowly but after 8 months they were receiving a steady
check of $400 a month which also goes into their savings
account. This part-time business will continue to grow with the
effort they dedicate to it.
This business also offers them some very lucrative tax savings.
By taking advantage of these Tax Strategies they are able to
save an additional $300 a month on tax that was normally
deducted from Marty's paycheck at work. This monthly income is
also added to the couple's savings.
Marty has just begun writing an E-book about his "production
expertise" at work. His plan is to market this book on the
internet for profit
Every Sunday the couple takes a drive to stay familiar with the
Real Estate market in their area. They're looking for another
property, a "handyman's special" to fix-up and rent out. They
have saved enough for a down payment and their credit with the
bank is well established.
The family's total monthly expenses are $2000. Now, here's the
question:
Does Marty's family have Wealth yet?
To answer this question properly you first have to understand
exactly what "wealth" means.You achieve wealth when: *Your
Passive Income is the same or greater than your Expenses.* So
what does this mean?
First, what is Passive Income?
Passive Income is money that you are paid over and over again
for work that you only do once. (This excludes using a gun or
finding cash on the street) Some examples of this would be
royalties for writing a book or a song, commissions that you
receive for sales that others make and interest from bank
savings or dividends on stocks/options that you own.
Second, what Expenses are we talking about? This one's a little
easier to understand. Expenses are the total amount it takes to
run your household and your life. This includes, rent, mortgage
payments, car insurance, food, credit card and loan payments,
etc………
Let's look at Marty's family a little closer…………. Does Marty
have any Passive Income? Yes he does. Marty's salary is not
considered Passive Income. That's because he has to work 40
hours a week just to get the basic amount. If Marty doesn't go
to work then he doesn't get paid. His overtime also doesn't
count as Passive Income.
The interest from their Retirement Fund does though. It's paid
to him month after month as long as it's left in that account.
So, $32,000 at 5% is $1600 a year. Divided by 12 months equals
$133 a month in interest. Ok…..what else?
After the mortgage and expenses are paid with the rent money
they receive on their rental property they are left with $300
every month. This is Passive Income. Just as long as the tenant
stays and pays his monthly rent.
How bout that $400 from the home-based business and the Tax
savings. Is this Passive Income? Well, Marty's wife made sure
that she chose a company where she could sign new business
accounts and get paid commissions on those accounts over and
over again. They've made a 5 year commitment to build this
business part-time. So yes, both the $400 and the $300 in Tax
Savings would apply as Passive Income. Let's add up Marty's
total Passive Income.
Interest $166.00 Rental Income $300.00 Home Based
Business$400.00 Tax Savings $300.00 Total $1166.00
Not including Marty's salary from work, his family's Passive
Income is $1166.00. Not bad. Every month this amount flows into
the family's bank account, regardless of anything else they do.
We said that Marty's monthly expenses total $2000.00 a month.
And we also said………… You have Wealth when: *Your Passive Income
is the same or greater than your Expenses.*
$2000 Expenses subtract $1166 Passive Income = $834 monthly
balance needed to have Wealth.
Marty's Expenses are still more than their Passive Income so
they're not wealthy just yet. But they're well over half-way
there. With this kind of knowledge a family can know exactly
where to focus their financial attention.
Maybe when Marty writes that ebook he could get some sales and
royalties from it. Also the new Real Estate and more work on
their Home-based business would certainly help them to attain
more Passive Income. Once Marty's Passive Income is more than
the family's Expenses then Marty could start to have much more
freedom. He may even choose to quit his job and continue
developing his Passive Income streams.
Take a look at your own finances. What are your monthly
expenses? Do you have more Passive Income than your Expenses? If
you do Congratulations. You're Wealthy!!! If you don't. It's
time to get started and start adding Passive Income from other
areas as soon as possible.
When you truly understand this principle, you'll be well on your
way to becoming wealthy
Monday, May 5, 2008
7 Reasons You Should Be Using The World Wide Web To Leverage Your Local Business
More and more, potential customers are not letting their "fingers do the walking." To find what they need, they are using
their fingers to click at Google, Yahoo! or MSN .
If you do not have a website – you are loosing them before you even have a change to tell them about your product or service. Think of a Web site as multiple, full-page Yellow Page ads that gets 100 times more results for your local business.
Cover every business category and geographic region for a fraction of the cost of a single Yellow Pages ad.
A Web site that works is the most cost-and-time efficient way to:
1. Build loyal lifetime customers
2. Grow Your Client Base
3. Build Trust With Potential Customers
4. Get the Jump on Competitors
5. Develop and Stay "Top of Mind"
6. Extend Your Reach - Attract new local (and global!) customers
7. Diversify: Open up new revenue streams.
But where do you start?
Well, you need to register a domain name, host your new site, build the site pages, submit your site to the directories and
them promote it. You’ll need other people to link to your site and you’d want to send your customers emails.
Perhaps most important of all you’d need to know how many people are visiting your site and how many of those are buying
from you.
It might seem like a lot at first glance and it can be, but not if you choose a company that gives you all the tools, in one place, with a straightforward, integrated, step-by-step process to support you every step of the way. Site Build It! (SBI!) is the only product in the world that combines site-building,
site-hosting, and site-marketing and that makes it easy for you to build a professional, popular, and profitable business. You don’t need any technical experience (html, ftp, etc.) either, they handle all that for you.
Sites built using SBI! consistently get high traffic, as a recent Alexa.com survey shows.
- 62% of SBI! sites fall within the top 3% most popular sites on the Internet
- 53% fall within the 2% most popular
- 35% fall within the 1% most popular.
If you can use e-mail and surf the Web, you can create a professional-looking, traffic-generating, sales-producing site.
Real estate agent, landscaper, restaurant owner, health practitioner, artist, alarm system distributor, boutique owner...whoever you are and whatever you do... Site Build It! (SBI!) is the affordable, all-tools-in-one-place solution you need to build and host a
Web site that WORKS.
There is no better time than now to get your business on the World Wide Web... before you competition does.
This article may be freely reprinted as long as all links and author information remain
their fingers to click at Google, Yahoo! or MSN .
If you do not have a website – you are loosing them before you even have a change to tell them about your product or service. Think of a Web site as multiple, full-page Yellow Page ads that gets 100 times more results for your local business.
Cover every business category and geographic region for a fraction of the cost of a single Yellow Pages ad.
A Web site that works is the most cost-and-time efficient way to:
1. Build loyal lifetime customers
2. Grow Your Client Base
3. Build Trust With Potential Customers
4. Get the Jump on Competitors
5. Develop and Stay "Top of Mind"
6. Extend Your Reach - Attract new local (and global!) customers
7. Diversify: Open up new revenue streams.
But where do you start?
Well, you need to register a domain name, host your new site, build the site pages, submit your site to the directories and
them promote it. You’ll need other people to link to your site and you’d want to send your customers emails.
Perhaps most important of all you’d need to know how many people are visiting your site and how many of those are buying
from you.
It might seem like a lot at first glance and it can be, but not if you choose a company that gives you all the tools, in one place, with a straightforward, integrated, step-by-step process to support you every step of the way. Site Build It! (SBI!) is the only product in the world that combines site-building,
site-hosting, and site-marketing and that makes it easy for you to build a professional, popular, and profitable business. You don’t need any technical experience (html, ftp, etc.) either, they handle all that for you.
Sites built using SBI! consistently get high traffic, as a recent Alexa.com survey shows.
- 62% of SBI! sites fall within the top 3% most popular sites on the Internet
- 53% fall within the 2% most popular
- 35% fall within the 1% most popular.
If you can use e-mail and surf the Web, you can create a professional-looking, traffic-generating, sales-producing site.
Real estate agent, landscaper, restaurant owner, health practitioner, artist, alarm system distributor, boutique owner...whoever you are and whatever you do... Site Build It! (SBI!) is the affordable, all-tools-in-one-place solution you need to build and host a
Web site that WORKS.
There is no better time than now to get your business on the World Wide Web... before you competition does.
This article may be freely reprinted as long as all links and author information remain
A Slice Of Success: Ways On How To Succeed In Real Estate Business
With a relatively increase of the everyday commodities, more and more people are finding ways how to earn additional sources of income so as to compensate their expenses. That's why most people who look for alternative ventures resort to real estate business.
However, even if real estate business appears to be lucrative to many, it still needs a lot of effort and skills to survive in the industry. So, for those who want to succeed in real estates business, here are some tips to ponder:
1. Set practical and sensible objectives.
Just like any venture, the key to a successful real estate business lies beneath a sound and sensible target. This will serve as the guiding principle of those who wish to make it to the top. Through these objectives, people who are involved in real estates business can focus more on areas that need concern like the market, clients, and strategies that will make their business profitable.
2. Choose the right real estate strategy.
The key to a successful real estate business is to come up with a certain strategy that will supplement the objectives stated on the entrepreneurs’ business plan. This strategy will also provide the right moves to take based on the kind of profit the real estate entrepreneur wants to achieve like an express cash or wealth establishment.
3. Entrepreneurs should acquire the characteristics of an ideal real estate agent.
In order to succeed, people involved in this kind of business should acquire the characteristics of an ideal real estate agent. He or she should be adept in finding the motivated seller, determine the value of properties, and knows how to negotiate with their clients.
4. It's a must to know the laws.
Part of being successful in real estate business is to know the existing laws of the state such as tax laws. Such that, if a real estate businessman does not know the laws, he or she may end up losing a lot money or worst end up in jail.
5. It is important to hire a reliable accountant.
This is extremely important to almost any type of business. This is, in reality, significant in order to succeed in real estate business because the transactions involves money, and one of the person who is skilled to analyze and interpret monetary information is a certified accountant. Through the help of an accountant, people behind the real estate business will be able to track the ebb and flow of the market.
However, even if real estate business appears to be lucrative to many, it still needs a lot of effort and skills to survive in the industry. So, for those who want to succeed in real estates business, here are some tips to ponder:
1. Set practical and sensible objectives.
Just like any venture, the key to a successful real estate business lies beneath a sound and sensible target. This will serve as the guiding principle of those who wish to make it to the top. Through these objectives, people who are involved in real estates business can focus more on areas that need concern like the market, clients, and strategies that will make their business profitable.
2. Choose the right real estate strategy.
The key to a successful real estate business is to come up with a certain strategy that will supplement the objectives stated on the entrepreneurs’ business plan. This strategy will also provide the right moves to take based on the kind of profit the real estate entrepreneur wants to achieve like an express cash or wealth establishment.
3. Entrepreneurs should acquire the characteristics of an ideal real estate agent.
In order to succeed, people involved in this kind of business should acquire the characteristics of an ideal real estate agent. He or she should be adept in finding the motivated seller, determine the value of properties, and knows how to negotiate with their clients.
4. It's a must to know the laws.
Part of being successful in real estate business is to know the existing laws of the state such as tax laws. Such that, if a real estate businessman does not know the laws, he or she may end up losing a lot money or worst end up in jail.
5. It is important to hire a reliable accountant.
This is extremely important to almost any type of business. This is, in reality, significant in order to succeed in real estate business because the transactions involves money, and one of the person who is skilled to analyze and interpret monetary information is a certified accountant. Through the help of an accountant, people behind the real estate business will be able to track the ebb and flow of the market.
A Real Estate Formula
It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.
When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash.
The Simple Real Estate Formula
You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can't get it for less than, say, $99,000, you walk away - there are always other opportunities.
Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we'll say you spend $5,000. Let's suppose the house is worth $116,000 now. You're ready for the next important step in this real estate formula.
You put it up for sale, targeting buyers who can't get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor's commission. Let's say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course.
This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%!
In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again.
They made millions. Did you know that if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years? That's the power of a good real estate formula
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