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Property Tycoons – Use Other People’s Money to Fund Your Investments
Becoming a property tycoon remains an unreachable dream for many. However, it is not as unachievable as you think it to be. One of the strategies that many property tycoons often resort to is using other people’s money to finance their property investments. This article will provide concrete means of accomplishing the tasks that pave the way to becoming the next property tycoon.
Recent research has trumpeted the anticipated rise in the number of property tycoons. Market analyst Mintel revealed that the number of individuals who make significant amounts of money in the property business are expected to double by the end of the decade. The estimated growth is being attributed to the prediction that one million homeowners will be renting out a second property by the year 2010. What does this indicate? That you can take advantage of a growing market and eventually achieve the financial goals you set for yourself.
More and more property owners are in position to become property tycoons after reaping the benefits that bricks and mortar property investing offers and its importance as a compliment to saving for retirement. But if you want a strategy that has helped many others to succeed and become tycoons in property themselves, it’s using other people’s money (OPM) to finance a property investment portfolio. If you haven’t yet learned about the technique, here are some things you will want to look into.
Many property financing services offer no money down schemes. There’s bridging loans which let you buy properties using other people’s money as a deposit. While a bridging loan has a preset repayment date, you can choose to follow an open schedule. This is one way of growing your property portfolio without having to rely on your savings.
How to buy using other people’s money
One of the easiest methods of obtaining properties without having to spend a fortune is by finding properties that have been sitting on the market for a considerably long time. Many of these homeowners are motivated sellers who look to selling their houses fast that they’d be willing to give a hefty discount to the buyer – oftentimes below market value.
To ensure that the property is indeed below its true market value, get a surveyor in. He has the experience to declare if the property you want to acquire is indeed a BMV property and will make a note of this on the surveyor’s valuation report. This assessment will be especially beneficial when you want to buy a property without having to spend your own money.
Another effective way of sourcing BMV properties is through property auctions. Due to the evening out of property prices, it is now possible to make big profits at auctions. If you plan to take part in an auction, you may want to heed what some experts at buying at auctions recommend: Target no less than 5 properties in each auction and prepare yourself to purchase any one of them on the day of sale.
The basics
Of course, if you’re buying at auction you will need to do crucial research on the properties you’re eying. Carefully go through all the documents associated with those properties. Choose the property that best answers your needs with regard to your investment goals. Set your maximum bid price and always remember to adhere to it as this will help you avoid making the mistake of over-bidding. Prior to attending an auction, get your finances in good shape since you’ll need to make a 10% deposit once the gavel falls on your bid.
Using other people’s money is one of the most attractive aspects of property investment. Once you have learned the finer points in using other people’s money to finance your property investments, the possibility of you becoming the next property tycoon won’t be too distant.
Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide – http://www.Property-System.com.
Article Source: http://EzineArticles.com/?expert=Parmdeep_Vadesha
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