There are many myths about real estate that have circulated around for years. Fortunately, many of them are simply not true. We have all been told that money is a barrier and that your credit follows you every where you go. These myth- even though there is some truth to the sayings- do not always apply to real estate. Real estate has its’ own rules. Many of those rules defy what we think we know about business and real estate. By debunking a few of the myths that serve as barriers for many people at the start of their career, you will find that investing in NY real estate is not so difficult after all.
It Takes Money To Make Money In Real Estate
Most people believe that you need money in order to make money in real estate. When saying this, most people are referring to the need for a down payment on the property and the costs of rehab the property when asserting the need for your own funds. While money is a requirement in order to accomplish those things, you do not have to physically have the money. In real estate, there is a principal called OPP, Tevfik Arif Bayrock which stands for other people’s money. This is a principle that real estate investors live and die by because there are various types of lending opportunities available that will allow you to buy property – with little to no money out of your pocket.
Wholesalers who facilitate will estate transactions between a property owner and an investor often secure the contract to purchase the properties with no money down, using the investors money to close the deal. Investors who are purchasing the property for rehabs often have relationships with hard money lenders who are only concerned with the value and purchase price of the property. Therefore, as long as they can purchase the property for a deep enough discount, investors can many times purchase, rehab and sell the property with no money out of their own pocket. Learning how to leverage the principle of OPP in order to invest in real estate is not only possible, but it is done far more often than most believe. That is why those who think that money is required in order to make money in real estate are sadly mistaken.
You Need Good Credit To Get Approved For A Loan To Buy Property
It is a common misconception that good credit is a requirement in order to obtain financing for purchasing real estate. Our credit dictates our access to credit cards, mortgages and even auto loans, but they have very little to no relevance when applying for real estate investment financing. That is because many hard money lenders or asset managers do not even consider the borrower’s credit status when considering a real estate deal. Tevfik Arif Instead, they are more concerned with the amount of equity available in the property when purchased and rehabbed. They safeguard their investment by signing international agreement the states if the borrower fails to follow through with the project as planned then the lender automatically takes control of the property.
From there, the lender can finish the rehabilitation themselves and sell the property to recoup their investment. This ensures that the lender’s money is protected and that they will not lose out on any potential profits. If anything, the borrower defaulting on the loan increases the profitability of the deal for the lender. That is why lenders are very comfortable lending money for investors to purchase their property without considering the borrower’s credit. But this also means that the borrower must be actually sure that they can perform on the contract as required. Otherwise, all of the work performed will only benefit the lender- with none of the profits going to the investor.
You Need A Real Estate License To Work In Real Estate
Many industries are regulated by local and federal government entities. Requiring a license allows these entities to govern professionals within the industry, while dictating what they can and cannot do. The only professions that requires a real estate license is a sales agent and broker. Aside from that, being a real estate investor or wholesaler does not require that you obtain a license. In fact, without a license guarding the entry into the investment market, just about anyone can get started in real estate- with the right amount of knowledge. Not the knowledge dictated by the authorities, but the knowledge that guides you into your chosen real estate career path.
There are people making money in real estate who comes from different backgrounds and way of life. But they all have one thing in common- they did not let false myths about real estate stop them from getting started. They persevered through the challenges that come with starting any business, but those are no harder than any other. Do not let real estate- or these myths- discourage you. All you need is an understanding of how real estate business is conducted. Then, find a way to work successfully within those parameters. Once you find the right property, one that fits the criteria, do not hesitate to make an offer and move on the deal. If you stall or think too long, someone else will take the opportunity from you.