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Informative Articles

Getting Started in Real Estate!
A Single’s Game of Real Estate (Getting started in your twenties) By Dan Auito This discussion leans toward answering questions asked most often by our youthful men and women in there early twenties. They often begin to ask themselves the...
Home Improvements - Making Decisions
If you have a family, planning home improvements should be a family matter. Still, you want to stick to ideas that work. Ideas That Work We've all seen families who get along well most of the time and families who are constantly at odds...
Kitchen Design – Understanding the Work Triangle and Kitchen Layouts
Having a good layout for your kitchen is important, because the kitchen should be an efficient and pleasant area in which to prepare meals and do related tasks. Understanding the kitchen work triangle concept and the basic kitchen layouts is a...
Orlando Vacation Home Ownership
So you have selected an area – Orlando – entertainment capital of the world and home to Mickey Mouse and all his friends. First thing is to contact some realtors to show you around some properties. You should look for communities which are centrally...
Property Investment – How To Calculate Rental Returns
Before purchasing an investment property for rental purposes it’s always a good idea to calculate whether it will be cash flow positive or cash flow negative. That is, will the property generate an income (positive) or will it require a monthly cash...
 
Real Estate Investing: Beware Of "Subject To" Promises

Another real estate writer's mini course, full of promises and fluff, ended with a "lesson" on why you need to buy his book so you can finance multiple properties "subject to." The reason, he said, "because banks won't let you finance more than ten mortgages."

This simply isn't true.

First, banks let you finance as many mortgages as you can pay for. Some banks limit the number of loans made to one person. Experienced real estate investors just move on to another lending institution.

I know one investor who owns more than one hundred single family homes. All have mortgages. He constantly refinances one rental for the down payment to buy the next. Besides living off the cash flow from his rentals, he also refinances a rental occasionally to take his family on a first-class vacation.

Another investor, my friend who owns the carpet company we use for our fixers, owns more than fifty rentals. None were purchased "subject to" the existing loan. Many were purchased "all cash" for quick closings, with mortgages added later.

For beginning real estate investors, looking for an owner willing to sell their property "subject to" the


existing loan adds a frustrating component to the search for a profitable property. Today's savvy home sellers just won't sell to a buyer who can't cash them out.

Of course, some investors offer "subject to" and lease-option purchases. But, properties with most of the equity stripped out come with payments too high for rental income to support. These properties make better candidates for owner-occupant home buyers with poor credit who don't mind paying more for a house.

Beware of "subject to" seminars, books, and promotions. This real estate investing method worked last century.

Copyright © 2005 Jeanette J. Fisher. All Rights Reserved.


About the Author: Jeanette Fisher teaches real estate investing and credit college courses. Jeanette is the author of "Doghouse to Dollhouse for Dollars" and other books. For a free report, "Design Psychology for Selling Houses," visit http://doghousetodollhouse.com

Source: www.isnare.com