How To Buy Real Estate - Yes, YOU CAN!

If you want to buy a house but don't think you can for any of the following reasons, this article is intended to give you correct information so that you can make smarter choices and open yourself up to a world of wealth, possibilities and realistic expectations.

The truth is you are being unrealistic when you believe the following reasons to be true:

I can't buy property now because?

• I don't have 20% for a down payment, let alone 5%, let alone even 1%.
• I don't have any money for closing costs.
• I won't qualify for a loan (I have poor credit, don't make enough money, can't prove my income, haven't been at the same job long enough, etc.)
• The market prices are too high now.
• I don't want to live in a bad neighborhood and that's the only place I can afford one right now.
• I can't afford the mortgage payments with my current income.
• Fill-in-the-blank.

I am here to tell you that you CAN buy property, regardless of any of the above.

In this day and age, there is absolutely NO reason why anyone can't own their own home. The strict days of the 20%-down-excellent-credit-and-stable-well-paying-job loans are over, replaced by no-down-payment-prior-bankruptcy-and-stated-income loan programs.

With the wide array of today's diverse lifestyles comes an abundance of opportunities and programs created for each and every possible situation. Businesses need to make money, and the best way to open themselves up to a larger range of customers is to offer services for the vast and varied circumstances of each individual.

Many lenders today offer little to no down payment programs, poor credit leniencies and even no proof of employment or salary requirements (in lender speak, it's called "stated-income programs" where you simply state your income to the lender without having to prove it with pay stubs, W2's, etc. This is widely used by freelancers and consultants).

In addition to the countless programs offered by lenders, there are now government grants and (often free) services available for the low-income, low reserve home buyer as well as plenty of programs for first time home buyers. Government programs and many private loan programs also offer assistance for closing costs (the costs required up front to pay for lender fees, escrow & title charges, etc.), with some programs requiring the seller to pay for most of them.

For a list of government grants, go to www.cfda.gov (The Catalog of Federal Domestic Assistance) or www.firstgov.gov (The US Government's Official Web Portal). Click on "Benefits & Grants" to get to their grants page.

"Ok, that's great," you're thinking, "but the real estate market is so inflated now, even if I could qualify for a loan, how am I going to afford a house in the neighborhood I want?"

Welcome to the wonderful world of foreclosures, tax auctions and rehabs (otherwise known as fixer-uppers)! It is a myth that all foreclosures and tax-defaulted properties are in poor, run-down neighborhoods. One good thing about foreclosures and tax-defaulted properties is their indiscrimination. They occur in gang-ridden crack neighborhoods, middle class neighborhoods and elite million dollar communities alike.

Another benefit is that they are generally much cheaper than the lowest priced house in the same neighborhood. We all know the difference between retail and wholesale. You could go to the mall and buy a shirt for retail at $20 or you could go to the garment district in the city and buy the same shirt for wholesale at $10, or better yet, with the advent of the internet, you could do all your wholesale shopping online in the comfort of your pajamas.

The same is true for real estate. If you wouldn't spend that extra $10 dollars to buy a shirt at retail, why would you spend an extra $10,000 (or usually more) to buy a house at retail?

In the industry, houses that are listed on the market are considered retail. Houses you find through foreclosures and tax auctions are considered wholesale. These are discounted houses, available at a low price for a quick sale, usually because the Bank or County is seeking to simply make back the money they've spent on it before (and after) the buyer defaulted. This equals to huge savings for the educated buyer.

Rehabbing is buying houses that are a little less than perfect and fixing them up, either to sell for a profit or to keep as a residence. Some people enjoy the challenge of buying a property that needs a complete overhaul (new roof, extensive remodeling, structural fixes, etc.) while others prefer a "cosmetic fixer," a house which needs a little touch up paint here and there, some flowers planted in the yard, maybe even a new kitchen countertop, etc.

Cosmetic fixers are a fun and easy way to make money. You get to do a little artistic handiwork (even if you've never done it before) and make money at the same time. The quick profits you yield can be rolled over into a bigger and better house, you can repeat the process over and over again, working your way up from a $50,000 house to a $500,000 house within a few years ? and the best part, it's all tax-free!

Called a "1031 Exchange," the gains you receive from selling the house can be tax-deferred as long as you continue to buy an equal or higher priced house with the proceeds you make from the sale. Unlike a straight sale of a residence, there are no occupancy requirements or live-in time restrictions for a 1031 Exchange. For a residence, federal law states that you must live in the home for 2 out of 5 years of ownership in order to avoid capital gains tax. You may choose to live in it for 2 years and bank the proceeds ? yes, tax free! ? or you may choose to flip it and do a 1031 Exchange ? yes, tax deferred!

If you're sitting there scratching your head, thinking all this sounds like too much work when all you want is simply a house to call your own, chances are good you can still find a great deal in the retail market as well.

If you are convinced, or even slightly convinced that you just might be able to buy a home after all, here are some steps for the average, traditional home buyer.

• The first step is to figure out how much you are willing to spend. Get your finances in order by evaluating your current total monthly income against your current total monthly outgo. If you are paying $800 in rent now, how much more can you afford per month? If you don't want to pay any more than $800 a month, but really can, I urge you to look at the bigger picture. Is it worth it to spend a little more per month now to ensure you have an investment that could reap significant returns for you a few years later? Is it worth it to invest that $800 a month (and a little more if necessary) into YOUR future prosperity and not your landlord's? Is it worth it to live without Direct TV or 100 cable channels or 3,000 cell phone minutes in the short term to invest in your financial freedom in the long term?

  Be careful not to overstretch, however. You still want to enjoy your home without cursing it for breaking your bank. Depending on your financial situation, it may not be necessary to cut costs or stretch to purchase a home, but if so, what is owning your own home worth to you?

• The second step is to find the right lender or broker. You need to find a lender/broker so that you will know how much house you can afford. They will tell you how big of a loan you qualify for, based on your income vs. your debt (debt-to-income ratio), how much the monthly payments will be approximately, and how much your upfront costs will be, if any.
• Once you find the right lender, the third step is to find an agent. As a buyer, you do not pay an agent. The agent makes a commission from the seller's final price. The commission (usually 6%) is split between the buyer's agent and the seller's agent (and their broker). If you can, be your own agent. If you find a house you like on your own, you can often offer the seller a lower price since they won't have to pay part of that to the agents and can afford to lower the price for you. Sellers usually factor in the agents' commissions when setting their asking price.
• The fourth step is to get to know the market. Knowing what to buy, when to buy and where to buy is key to making money in real estate. Watch the market, talk to agents, sellers, buyers, investors, anyone who might know the neighborhoods you're interested in. Be open to neighborhoods you haven't thought of or heard of. Your agent can help you with this too. If you have found a good agent, they will share with you their knowledge of the market based on their experiences being in it every day.
• Know what you want and why. There are numerous ways to make money in real estate. They range anywhere from simply buying low and selling high, to rental income property, to purchasing notes and certificates, to the aforementioned ways and more. Do you want to make a quick, instant million? Or do you want a modest but steady stream of income to be comfortable? Or do you just want to buy a house to live in, a house your children can grow up in? Study your options and go with the one that appeals to you regardless of whether you know anything about it and whether you think you can do it or not. Find your niche in the market and follow it.
• Learn from others who have done it. If your knowledge is insufficient due to lack of experience, let someone else's experiences guide you. Take courses, read books, talk to others who have led the way and have achieved success in what you want to do. Don't listen to anyone who hasn't done it themselves, especially ones who tell you that you can't. "Borrow" someone else's knowledge until you gain your own through experience. There are a lot of materials out there to get you started.

Above all, the BEST thing you can do for your success is believe in yourself, believe it CAN be done and go out and do it! Stop wasting your time making up excuses why it CAN'T be done and start spending your time more effectively by finding ways it CAN.

Teresa Franklyn is author and publisher of The Daily Dose, a popular inspirational online publication. When she's not passionately typing away at her computer, she enjoys investing in Real Estate for fun and profit. For more information and helpful links about how to get into Real Estate, visit her website at http://www.followyoursoul.com. To read about her adventures as an Owner/Builder, visit her Blog at http://followyoursoul.blogspot.com

---

Real Estate Investing - The Marvel Of Home Depot And Lowes

Repairing a rental home (or your own home) use to... Read More

Buying a Home in Westminster

The city of Westminster is centrally located in the Denver... Read More

Transforming Doghouses into Dollhouses

Successful real estate investing depends largely on a correct assessment... Read More

Your Home Equity Can Work for You

"Use your home's equity to pay off your debt. It's... Read More

San Diego Home Evaluation

The Southern California city of San Diego has all the... Read More

Closing Costs When Buying A Home

Closing costs are often the last thing a person thinks... Read More

Home Selling: How To Set The Right Asking Price

Many homes remain unsold for a long time because they're... Read More

Setting Goals for Real Estate Success

The power of goal setting has been well documented and... Read More

Look Past the Bottom Line for a Propertys Potential

It's unfortunate that many real estate investors tend to look... Read More

Getting Started in Real Estate Foreclosure Investing

Decide to Invest in Real Estate Foreclosure InvestingWith the increase... Read More

Realtors Brainstorm For Business

Even though rates are down opening up the market for... Read More

A Difference Between Appraisal, Assessment, Home Inspection

Every one should have a home inspection before purchasing any... Read More

Selling Houses: Psychological Effects of Landscaping

Buyers think they care more about the inside of the... Read More

Land Subdivision - $1.2 Billion Dollar Developer Tells You How To Do It

Land subdivision is a bit like helping Mom slice up... Read More

Investment Property - Leveraging Rental Property Equity

Owning investment property is a tremendous wealth building strategy. Thousands... Read More

Real Estate Investing: Beware of Subject To Promises

Another real estate writer's mini course, full of promises and... Read More

11 Different Ways to Participate in The New Millennium Real State Boom

Many parts of the country are going through a real... Read More

10 Top Considerations For Those Buying Property Abroad

Are you one of a growing number of people considering... Read More

Real Estate for Beginners: Residential Property Taxes

Whenever you own a piece of land, you will be... Read More

The Ultimate Short Sale Secret

Buying foreclosures can be extremely profitable for real estate investors.... Read More

Condo-Hotels ? A New Second-Home Alternative to Time Shares

Condo-hotels have evolved as a better, more reliable second home... Read More

Seven Tips in Choosing Maui Income Properties

Aloha! If you are interested in choosing a Maui income... Read More

Investing in Real Estate Vehicle for Wealth Building

Real estate is one of the best vehicles of building... Read More

I have a buyer for your property and I can sell it now!

A Realtor has just talked to you and said, "I... Read More

Home Sellers Warning for Young Families

If you're thinking about selling your home and moving up,... Read More

How to Sell Your House For Full Price

Many people believe that a real estate broker is needed... Read More

Joint Ventures In Real Estate Development; So How Do They Work?

There are many reasons why you would consider joining with... Read More

New Home Construction - The American Dream or The American Nightmare?

Buying a new home is suppose to be the American... Read More

Why is Now the Time to Buy in Turkey?

Turkey is a paradise of sun, sea, mountains, and lakes... Read More

Why A Final Inspection Is Necessary

In the sales contract, the sellers of your new home... Read More

How Do I Fix Up a Home to Sell?

The first thing you need to do is stop thinking... Read More

How to Negotiate a Successful Short Sale

Anyone who has ever profited from doing a short sale... Read More

Real Estate Wealth Protection Through Short Sales

Is a sharp correction in store for the real estate... Read More