Millions were made in the real estate market earlier this decade. Now, millions are being lost. The availability of easy money in the form of mortgages is reaping a bevy of foreclosures and their are major tax consequences to foreclosures.
You might say it is sunny outside. The IRS, however, would say there is simply a lack of d... Read more
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The savviest real estate investors know the difference between good debt and bad debt.
Most advice to consumers agrees that the ideal situation is to be debt free. Most consumer education treats all debt as bad. Unlike this consumer ideal of being debt free, the most knowledgeable real estate investors welcome debt. They consider that debt can be a real estate investor's best friend. The reason for this is OPM. OPM is a short-hand way to refer to "Other People's Money." OPM is just another term for good debt. In addition to OPM, another way that investors talk about using borrowed money is the word, "leverage." Consider using a crowbar to move a heavy object. The crowbar allows you to move the heavy object. Good debt is an example of leverage. If you have to rely on your own strength, you are limited in what you can do. A lever allows you to move what you could not move without it. This concept from physics is relevant to borrowed money. You can use someone else's money as a lever to accomplish a bigger task than you could accomplish with your own money. Consider a situation when you don't have enough of your own money to buy an investment property. When you treat borrowed money as a lever, you can use the borrowed money to buy the property you could not afford with your own money. This is the power of leverage. This is an example of good debt. You use borrowed money to create wealth. Debt is a tool you can use to buy what you could not buy with your own money. If the investment creates profit, you create profit from the leverage of good debt. This is not what happens when you take on consumer debt. If you buy an item, such as a plasma TV for $3000, you have taken on bad debt. The TV costs you money. It does not become a means to create profit. This is the difference between good debt and bad debt. Consumer debt does not give you leverage. It is not a tool you can use to create wealth. This is why consumer debt is bad debt. When you borrow the same $3000 to invest in property that leads to profit, debt is a tool to create wealth. This is the definition of good debt. If you want an example of using debt to create wealth, consider Donald Trump. He carries tremendous debt, which he leverages to build properties that in turn create even more wealth. Some of the richest people on the planet have the greatest amount of debt. Whether you call it leverage, or OPM, good debt is one of the fastest means to creating wealth.
This is not just a story, it is a true story. It is not just a story, it's a set of instructions that can awaken your amazing sales potential.
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If you think about money with a consumer mindset, you might assume that the only way to buy investment property is to buy it with your own money and ... A flexible rate mortgage (FRM) will afford you a more modest mortgage payment than a traditional fixed-rate loan across the initial fixed-rate time period, and you will receive free mortgage quotations for FRM lending on our web... Every sport has its rules. And if you are going to play the game, you need to know the rules of the game you are playing. Real estate investing is also a game with its own money rules. This means that you need to know the money ...
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