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How You Can Earn Infinite Returns In Real Estate

May 24, 2013

How You Can Earn Infinite Returns In Real Estate

ConveyancingEarning infinite returns on your investment is one of the most exciting accomplishments of a great real estate investment.  It doesn’t happen on every deal, but when it does, it’s awesome.  Infinite returns are achieved when you no longer have any of your money invested in a property, but you still own it and the property is still generating income.  You can earn infinite returns in real estate through two strategies.  One you’ve probably heard a lot about, the other isn’t quite as well known.  But both a extremely effective when you use them at the right time on the right opportunity.

Most real estate investors have heard of “no money down” real estate investment strategy.  In “no money down” investing, the investor finds a very motivated seller that is willing carry a loan for all of the purchase amount or at least the down payment amount.  This allows the investor to buy or take over the property without actually having to take any money out of his pocket.  So, by it’s definition, any returns you earn through no money down deals are infinite as you don’t have any money invested in the real estate in the first place.  It’s a great strategy to use if you can find a motivated seller that is willing to assist you.

There are two major problems with this strategy on most properties.  The first is that you have to find a motivated seller that is willing to participate.  Second, if they aren’t a very motivated seller, you usually have to overpay for the property to get the seller to agree.  In both situations, you have to have the sellers’ participation and that just isn’t an option in most competitive buying situations or highly desirable properties.  If you try to use this “no money down” investment strategy in a competitive buying situation, you don’t have a chance.  The seller is going to go with your competition’s offer that has “no-strings-attached.”

Let me suggest an alternative strategy for you to consider.  Let me suggest that you try a strategy that isn’t plagued by the major issues of the “no money down” investment strategy.  This strategy doesn’t require the seller’s participation or even that they have the knowledge that you are using it.  Yet, it still allows you to earn infinite returns on your investment.  You can even eventually end up with little to none of your own money in the property.  It’s called a cash-out refinance.

In a cash-out refinance the investment strategy is buy a property, increase its value (usually by at least 20-25%), and then refinance the property at a high enough amount to get your original investment out.

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