Real Estate is a very secure investment. The ability to collateralize real estate gives you a better chance to leverage off other people’s money. Have you ever gone to your rich uncle for money? Maybe you needed to buy books for school, or pay off some debt. Whatever the reason, there is no better cause for lending you money than buying real estate. Think about it…how does a bank make money? You put thousands in their accounts or cd’s and they give you 1-3% annual return on your money, to then turn around and lend that money at a much higher rate. In other words you lend them very cheap money and they turn around and make it expensive by creating demand. Well let’s see…if I invest $30,000 of my hard earned cash in a cd at 3% for a year I can make a whopping (drum roll)… $900 bucks?! Sorry but your rich uncle is much better off with what YOU have to offer.

Take this for instance: You ask your rich uncle to lend you that same 30,000 to buy and fix up a house, as well as pay any fees involved in the transaction. And then with a well thought out exit strategy you can pay him back in 3-6months (yes it’s possible)…at 10% simple interest. That’s $3,000!!! In max 6 months. Do this twice a year and now you’ve made him $6,000. That’s 20% annual return. Rule of 72 tells us you can double your rich uncles money is 3.6 years. It would literally take you 24 years to do the same at your bank!

Using the right security documents your piece of real estate is collateral in case you don’t pay your uncle back. He just basically cut out the middle man and is making money with his favorite family member!

Remember to always consult an attorney and obtain specialized training before implementing any of the above. It’s not as easy as it sounds, it takes a system and years of knowledge. Not that you have to have all the knowledge about investing using private money. But you do have to surround yourself with those who do.

Till next time,
God Bless!

Ernesto Tinoco
MOKSRealEstate.com