The Number 1 Rule When Investing in Contra Costa County Real Estate!
When in Investing in Real Estate in Contra Costa County or anywhere there is one simple rule to remember. This Real Estate Investing rule is so simple it even has it's own acronym - OPM!
What does OPM Stand for? Other People's Money! A very basic concept. But let me explain in more detail.
This goes hand in hand with another concept - Leverage.
For people without enough money to pay cash for an Investment Property OPM (Ussually the banks) allows them to use what money they have to Leverage the balance and purchase an Investment Property.
Now I know some one out there is saying "Duh, any idiot knows that!" But there are other reasons this is important.
Even if you have the cash to purchase an Investment Property outright it is not the best way to do it for several reasons. You will make more money by taking the cash and using that as a Down Payment (Leverage) and borrow money from the bank (OPM) to buy 3 or 4 Investment Properties. Even though you will pay a mortgage your over all rate of return will be greater, your risk will be less, and you will earn a lot more on capital appreciation.
I want to also point out another issue. If you invested $300,000.00 in a rental property with all cash in 2008 and the property today is worth $200,000.00 you have lost $100,000.00. However, if you purchased it with 20% down you only lost $60,000.00; the bank has lost $40,000.00. Now I do not think a short sale or a strategic foreclosue may be the right thing to do for everyone; but it is also an option that needs to be considered at times.
For a very readable and yet detailed look at Real Estate Investing get my Free Book of Real Estate Investing.
Then take a look at some of these great homes and give me a call at 925-260-4321.
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Where is Home Point Real Estate?
Home Point Real Estate is Located in the East Contra Costa County community of Brentwood we also provide service to Discovery Bay, Antioch, Oakley, and Pittsburg. Click on the Community to see Homes For Sale Now.
Does Home Point Real Estate Handle Bank Owned Homes?
Yes! Go Here to: Get the Free Bank Owned Homes Buying Guide and Get a Free List of Bank Owned Homes.
What if I am in Foreclosure, having Mortgage Trouble, or Want to Short Sale my Home?
Home Point Real Estate is the company for you! Contact Home Point Real Estate and request a Free Consultation with a certifies SFR (Short Sale and Foreclosure Resource) to see if there is a way to save your Home or to do a Short Sale and help Save Your Credit. Get the Free Short Sale information Report for Buyers and Sellers too. Click Now for Short Sale Information and Free SFR Consultation.
Can Home Point Real Estate Help me with Real Estate Investments?
Get The Free Book of Real Estate Investing from Home Point Real Estate along with the Free Investor Calculator. This Book covers complex investing concepts in any easy to read manner with plenty of examples. Including Tax Issues, How to Evaluate an Investment Property, and more.
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