First of all, the great feeling of owning a home is great, you can tell everybody, “this is my house, and I bought it.” You know that you not have to look for an apartment and move every year. You can paint it the way you want, you can furnish it the way you want. You can put a playground for your kids; you can grow roses, oranges, and other trees, depending on the weather in your city. You can grow big trees if you don’t have them already in your yard.

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Your house becomes your memories. If you have children, maybe they will grow as adults in them. You dream of playing with your children in your backyard. Your memories of sitting with your wife on a swing when you were young will always stay, because this is your home where you stayed and spent most of the best times of your life. People who are thinking of starting their own business my advice is buy your property and open your business in your own real estate instead of renting it. This way you are paying rent to yourself. As your property value will go up so you will have a business rent free. What ever mortgage interest you have paid your value of property will go up by that much value. Like us buy distress commercial real estate, set up our own business in that and eventually your Real Estate will be worth fortune. If business is good you will have no problem in paying the interest to the bank. Basically your interest payment is just like paying rent to the landlord. If the business does not go well then you can sell the business and lease it out your building to someone else and even then you will make money. In our case whenever we found a good tenant for long term lease and we could make a very good positive cash flow from lease business we moved out of our building our business and leased the property to some one else. In few cases we also built our business and sold the business to other people but kept the building. Property values go up when you have good quality long term tenants with good paying rents.

When prices of real estate goes up then either you can sell and cash your profits when good opportunity comes in or you can also borrow against the equity of your property if you need money for yourself and still keep the building and future appreciation of building will be still yours and the money which you have borrowed against your building you can invest it in another good property. Or if you have not borrowed against your building you can live a comfortable life with the rental income once the rent goes up after few years and your mortgage owing balance goes down.

Most people believe that they have to start saving at a young age to become rich and have to have money to buy real estate , which is not entirely true. You can start at any age, and also can buy real estate without money or other people’s money. As I said, in 5 years, which is 1725 days, you can still become rich or at least become financially independent if you will start saving and investing right as explained in this book

After going two times back and forth, their offer was accepted for $1.210, 000. But the banks won’t finance more than $800,000 and interest rates on commercial mortgages are always higher and the best rate they could get was 7%. But they only had $220,000 in the bank. They needed close to $210000 more to close the deal. They went to a broker who found them financing from a private lender who will lend them the money for a period of 5 years at 10% interest on a second mortgage. This rate was high but they could still pay all their bills and still had $20000 left in positive cash flow if the property stays all leased out and if they managed the shopping center themselves. They decided to go ahead and buy the shopping center. After only three years with their savings from the job and positive cash flow they were able to pay off the second mortgage.

BUILDING EQUITY

When you own your own home, you build equity. You will make it sure that no matter what, your mortgage payments are made in time. You do not want to lose all of the beautiful memories that you have with this house. Banks and mortgage companies are not scared to lend money to you on your house. On houses sometimes, banks lend only up to 100% while on commercial properties, if they are income producing, banks lend up to 60%. Why banks lend so much money on personal houses is because they know people will not let their houses go for foreclosure. As a matter of fact, only 18 houses in 1,000 go for foreclosure. Most of these people are those who bought bigger houses, more than what they can afford. When you own a home, you automatically save. Whatever mortgage payment you are paying, consider most or half of it as savings. You are building equity.

By Ashok of http://becomerichinfiveyears.blogspot.com



Investments in Real Estate: Personal Experiences – Part 2 · Investments in Real Estate: Case Studies – Part 2 · Investments in Real Estate – Part 3 · How To Buy Real Estate – How To Buy A Home · Investments in Real Estate: Case Studies of People – Part 1 · Investing Money in Real Estate – Interesting Facts · Recession And Bear Markets: Recessions And Bubble Bursts ·