If you have an existing piece of income producing real estate that you bought within the last couple years, you most likely have a significant amount of equity in that property. Even if you put a traditional 80% mortgage on the property when you purchased you may now have anywhere from 20% to as much as 60% to 70% equity on the property. How do you get that money out and put it to use in a new investment or use it to pay bills without selling your property.
Well, here are my top 4 ways to put cash in your pocket without having to SELL your real estate... Place a private second mortgage on your property - One of the best ways to get cash out of the property is by borrowing money from a private lender and giving them a second mortgage on the property as security. By way of an example, if you bought a property 5 years ago for $100,000 and put an $80,000 mortgage on the property at the time of purchase you had $20,000 equity. That property today may be worth $130,000 and mortgage paid down to $75,000 leaving you with $55,000 in equity. If you borrowed $30,000 from a private lender you now have $105,000 in total debt on the building. This leaves the debt-to-equity ratio at a very reasonable 81%. We do not recommend ever going above 90% debt-to-equity to allow some margin for future down turns. One of the primary ways we attract private lenders is through group luncheons and private meetings. We use the Private Lender Presentation Kit as our primary marketing tool to generate leads and convert individuals into our program.
Put a Rent-to-Own Tenant in the building - Under a rent-to-own program a renter with the desire to ultimately purchase is given 12 to 24 months to rent while fixing or improving their credit to the point where they can get a mortgage and cash you out. The great advantage of this method, and are many, is the tenant/buyer typically pays you 3% to 10% of the value of the property upfront in the form a non-refundable purchase deposit. This deposit can be anywhere from $2,000 to $20,000 cash in your pocket. If the tenant/buyer does not cash out or decides to move out you can legal keep the deposit and do the whole thing over again. Another advantage is that a tenant/buyer feels much more compelled to pay rent on time to get the purchase price credit that is only given if the rent is paid on time.
Refinance the existing mortgage with a new private lender mortgage - If you have an existing first mortgage on a property you can refinance the whole amount for new higher first mortgage using a private lender as your lender. Using the above example, if you have property worth $130,000 with a $75,000 first mortgage, you could refinance the first mortgage with a private lender for $105,000 and cash out $30,000 for yourself. The advantage of this method is that the cost of first mortgage alone will be lower than a first and second combination as describe above. You also avoid having the loan show up on your credit report and this usually improves your credit score.
Use your property to secure a line of credit - If you have one or more properties with a significant amount of equity you can use that equity to get a line of credit from a bank or local saving and loan. Again using the above example of property with $55,000 in equity you may be able to get as much as a $30,000 line of credit. We have found that banks will never go above 80% debt-to-equity with these types of lines. This type of financing has several advantages including no interest cost until you actual use the money and generally the interest rates are very competitive in the prime plus 3% to 6% range.
In Conclusion, we have outlined four ways to generate cash from your real estate with out having to sell your property. This has tremendous advantages in allowing you access to cash to do new projects or pay operating expenses.
Copyright (c) 2008 Michel Lautensack
I always knew that selling an eBook resale right was the fastest and most recognized way to make money on the internet. It is because of the low overhead and start-up costs associated. I can buy a decent eBook/software for about $6.99 each. I can then repackage it by throwing in my name and contact, maybe even change up the script a little to make the eBook personalized. I'll be able to sell it for $24.99 including the eBook resale right and make a cool $18 per eBook. Not bad, about a 250% profit margin. If I sell 4 books per day, I'll be making $72/day which is about $504/wk. That's pretty good considering it's a 7 day work week and about the same salary or more for many people out there. $24,192 per year from selling 4 eBooks per day at $18 profit is good money on the side, and it really is possible for many to sell more.
The real trick is how you can do this without having to struggle a lot and put forth a ton of effort. If you're looking to start selling with little money down and no advertising budget, then get ready for a long ride. It varies depending on your situation, but most people will find that that the ?bad? part of selling an eBook resale right is that it takes more time and effort than advertised. I always stress this because it is possible to work a day job and sell downloadable eBooks from the internet, but you'll have much less time for yourself. If you don't mind a long start-up period then no problem! But, if you want to start selling now and make money now, the bad part is that you will need to put forth about 2-4 hours per day creating your website (initially) and promoting it (ongoing). Writing articles and joining forums is one of a few methods for free advertising. You want fast advertising so you want to write at least 1-5 articles of 300-500 words per day. Once you reach about 200 articles, you're doing pretty well. Don't forget to start a blog and post entries almost everyday.
The ugly part is that even after you spend 2-4 hours/day setting up your eBook resale right products webpage and writing articles, there is no guarantee that you'll make a dent in the search engines. The engines, such as Google, pick up keywords in your articles and the more keywords that relate to your website, the better your results will be. I've known people to spend 4 hours/day for months trying to sell something, and they generated low traffic and no sales ? all because of untargeted keywords. As in all businesses, you have to have a marketing plan ? even if it's made in increments as you progress. Plan on your keywords you're going to use for your website and define specifics such as how much time you want to allocate to specific activities, how many articles you will write per week, etc. Always have at least a short-term future marketing plan. You like reading? If so, great, but if not, that could get ugly.
In order to sell your products effectively and learn traffic techniques, you'll need to read like a mad dog. I've read over 100 articles and helpful eBooks that I purchased (and am currently selling), and I'm still learning! Hours of just reading have been spent, but you need to do this if you don't have a professional sitting beside you.
Selling an eBook resale right is profitable and you can make a living doing so, but just keep in mind that you can waste valuable time and effort if things are don't properly. Educating yourself is the key to success, so read, read, read!
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Michel Lautensack has sinced written about articles on various topics from Real Estate, Personal Desktop and Finances. Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, Pa and creator of the . This powerful. Michel Lautensack's top article generates over 2400 views. to your Favourites.
Manita Pd has sinced written about articles on various topics from Advertising Guide, Adsense and How to Sell on Ebay. Did you find this article useful? For more useful tips & hints, Points to ponder and keep in mind, techniques & insights pertaining to e-book marketing. Do please browse for more information at our website:-. Manita Pd's top article generates over 74000 views. to your Favourites.