Feedback Form
Home Features Mastermind Forums About Advertise Blog Network Contact Be An Author

How and Where to Get Loans to Build Your Real Estate Wealth by Tyler G Hicks: Part IV

How and Where to Get Loans to Build Your Real Estate Wealth by Tyler G Hicks: Part IV

How, and Where, to Get Loans to Build Your Real Estate Wealth by Tyler G. Hicks: Part IV

Get Section 8 Tenants for Steady Rental Income

Section 8 of the Federal Government Housing Program pays a portion, or all, of the rent for homeless or low-income families renting homes. In the New York City area, for example, the Emergency Assistance Rehousing Program (EARP) not only pays the Section 8 rent for homeless families, it also pays a one-time rent bonus to the property owner (you) after the family moves in. This bonus is:

Family Size

Number of People One-time Bonus

2$2,000
3$3,000
4$4,500
5$6,000
6$7,000
7$9,000
8$10,000
$1,000 for each additional family member.

To make the program more attractive to building owners, the City has added Section 8 subsidies, permitting rent payments up to the Fair-Market Rates. Maximum rental fees at the time of this writing were:

Fair-Market Rents

Studio $845
1 Bedroom $940
2 Bedrooms $1,069
3 Bedrooms $1,348
4 Bedrooms $1,515
5 Bedrooms $1,753
6 Bedrooms $1,992

Since rents rarely decline, you can expect these subsidies to rise as time passes. Thus, you have a bright future with such housing.

Other features of Section 8 rent subsidies are:

The rent subsidy does not include the gas and electric for the apartment. The tenant pays these charges.

Your bonus is paid in a single payment once the tenant is approved and signs a lease with you, the building owner.

Many areas have waiting lists of Section 8 tenants. So you can rent your apartment as soon as it becomes available.

You choose the tenant from a pool of eligible homeless families approved for Section 8 vouchers.

Buy, and Control Properties in Inner-City Areas

Inner-city areas—often offer the lowest-priced properties anywhere. And they also offer the greatest opportunities for creative financing. Thus, a reader called to say:

You Never Know When Luck Will Appear

“I saw an ad for a free legal two-family partially burned-out home in the Sunday paper. I called the owner and he said he was fed up with the vandalism in the area and would be happy to give me the property free of any charge. When it came to the transfer of the title my attorney told me that the state required that some money be paid before a title could be transferred. So I paid the seller $1 and the house was mine.

I quickly rented the house for $800 a month with an option to buy at a later date. Now, a year later, the person renting the house has repaired it completely and wants to buy it from me for $34,500.My only worry is the capital gain taxes I’ll have to pay because my ‘cost basis’ is just one dollar. But I do know I’ll have the money to pay the taxes because I’ll be getting all cash.” (MD).

Now the $1 this reader paid may not be zero-cash! But it certainly is very, very close to zero-cash. And her willingness to take a chance with a partially burned out property shows her creative spirit at its best.

Inner-city homes have many advantages for the creative real estate BWB. These advantages include:

Low, low prices in many areas.
Plenty of room for really creative negotiation of price and terms.
Lots of local government money help to rehab the property.
Enormous pool of renters ready to snatch up clean, safe apartments.
Local financing often available from both the private and public sectors.

So don’t turn your back on the creative financing attractions of inner-city housing! You may be overlooking the chance to become a real estate millionaire while providing good housing for needy families. And—of course—Section 8 benefits, described above, are fully available to you.

Search for Low, Low Down Payments

There are low, low down-payment properties available. All you have to do is look for them! That’s where most people fail—they just don’t look for long enough. As Ben Franklin said, “Plow deep while sluggards sleep.” Low, low down represents the second best type of creative financing. Look at this letter:

No-Cash Start and Just $1.00 Down

“I had no cash when I started this venture of owning income property 19 months ago but I acted on the advice in one of your real estate books. So far I’ve acquired about $200,000 in income properties and lake-shore raw land. I was able to buy two income properties for $1.00 down on each. I just sold one I didn’t want to deal with for a profit of $2,000 after owning it one year. Not bad for a $1.00 investment! I bought another building with eight apartments for $63,000 for a $1.00 investment. With the improvements I’ve made in it I could sell it for a $10,000 profit. There is no possible way I could put a price on the value your books have been to me during the last 19 months.” (Canada).

Of course, the lowest low, low down is zero-cash down. Here’s a reader who writes:

There’s No Lower Down Than Zero Down

“Your advice helped me acquire eight different apartment buildings last year, all with zero-cash down. In addition, they are producing a good positive cash flow.” (NY).

So how do you find low, low down properties? There’s really just one answer to this question. That answer is:

Look in every possible source for low, low down properties. These sources include: Your large-city Sunday newspapers, your local weekly newspapers, real estate agents, property management magazines, city and state housing agencies, federal housing groups, local real estate investor groups, local building owners associations and For Sale By Owner ads.

Keep looking until you find what you want. Looking costs little. But it can deliver big results! Why? Because there are few people willing to invest the time and energy it takes to look widely and deeply.

Borrow to the Hilt for Income Real Estate

While you were growing up you might have been warned: “Never a borrower be.” While that’s good advice for your personal life, it’s not accurate for business. And income real estate--remember--IS a business!

So for income real estate, the advice often is—Borrow to the hilt to get the income properties you want. Thus, a reader writes:

Fast Growth in Three Years

“For the last three years I have used your methods. I now have four apartment buildings worth $450,000. Three years ago I had only a triplex. By using your wonderful methods of borrowing to the hilt, I have been able to acquire these four larger buildings.” (CA).
When you borrow to the hilt you use the value of the properties you own to collateralize (back up) your loans. So:

The property you’ve bought on borrowed money backs up new loans for more property—which you buy using borrowed money!

While the property you bought with borrowed money pays off the debt you incurred to buy the property.

Leading to the famous: Money Makes Money; and the Money Money Makes Makes Money!
So don’t be afraid to borrow money for income real estate. Just be sure you have a positive cash flow from every property—after paying on all loans associated with that property!

Use Home Equity and Personal Loans to Build Your Wealth

If you own real estate now you can borrow against your equity in it and use the money to buy income real estate. This technique of creative financing is used again and again by real estate BWBs. Here’s a letter from a reader showing this method at work:

100% Financing with a Home Equity Loan

“I currently own a 4-unit apartment building bought with 100% financing using a home equity loan for the down payment and settlement costs. I am using your principles which you give in ‘How to Make Big Money in Real Estate.’” (DE).

Yet another reader is using a personal loan, thus:

Getting Started With a Personal Loan

“I just wanted to let you know I bought an income condo with zero cash down by borrowing from my pension, using a personal loan. I got a good interest rate because its in a new condo development. Since its a first mortgage I don’t have a balloon payment to worry about later. It may not be the biggest deal ever reported to you. But I did get started. I put thought into action! I feel your newsletter helped me with an article you had on condos that sparked me to do something ASAP to get the ball rolling.” (IL).

There is good news for you about home equity loans and creative financing. When you apply for a home equity loan you never need tell the lender what you plan to use the loan money for. So you can buy as many properties as you can afford using a home equity loan.

With a personal loan you must tell what you intend to use the money for. Acceptable uses include: Education, Vacation, Home Improvement, Debt Consolidation, Medical, Dental, Miscellaneous, etc. Unacceptable uses include—for certain lenders—Home or Real Estate Down Payment. Other lenders make personal loans for these uses. You are not allowed to borrow personal funds to buy stocks or bonds, unless you’re using a stock broker’s margin account.

Places where you can get personal and home equity loans include:

Commercial banks
Savings banks
Credit Unions
Finance companies

To get a loan from any of these lenders, be sure you type your application throughout. And if your FICO score is less than 600, or your Debt to Income is more than 35 percent, have a cosigner handy to help you get your loan. And be certain to use some of your loan for the stated purpose given on your loan application!

Mortgage Out to Get Paid for Creative Financing

Earlier (see above) we said that low, low down payments were the second best type of creative financing. So what, you ask, is the BEST type of creative financing? It is Mortgaging Out where you:

Are paid to take out a loan to buy income-producing property.

Pay off your loan with income from the property you bought with the loan money.

Receive tax-free cash at the closing to use for whatever purpose you choose. If would be wise to use your mortgaging-out cash to buy more income property!)

So you really can’t beat Mortgaging Out as a way to real estate wealth. Just take a look at this letter from a reader:

Mortgaging Out in Country Property

“I bought 30 acres of land plus house, barn, equipment shed, cattle shed, silos and smokehouse at auction for $60,000 and got a loan from the bank for $65,000. The assessed value at the courthouse at the time of the purchase was $114,000. So I mortgaged out with $5,000 cash plus the property!” (VA).

Mortgaging Out with Development Land

“I opened a company and bought—with 107 percent financing—my first investment real estate. It is a piece of land zoned for apartment buildings.” (Canada).

Yes, mortgaging out can be your way to real estate riches. But to mortgage out you must plan each step of the way. You must:

1.Pick property that has a market value higher than the purchase price.
2.Arrange for secondary financing that’s based on the market value, not the selling price.
3.Have good legal advice from a competent attorney every step of your way.
4.Be completely honest in all your dealings with lenders.
5.Give accurate, checkable facts on every loan application you fill out.
6. Work your numbers on every property. If you’re not good at numbers, I’ll work them for you, if you’re a two-year, or longer, subscriber to my International Wealth Success newsletter, or to my Money Watch Bulletin newsletter.

Other Ways to Creative Financing

Real estate—the world’s best business—has hundreds—if not thousands—of ways to use creative financing to acquire income property. We’ve touched on just a few in this chapter. Later in this book you’ll find many more creative approaches to financing income property.
To get some of this creative financing for your deals, keep alert to the many opportunities that come your way. And if you ever have any questions, give me a call. You’ll find my business phone and fax numbers at the end of this book.

Your Keys to Real Estate Riches

Creative financing can get you started in real estate on little—or no—money sooner than you think.

When you use creative financing you capitalize on your financial lacks or drawbacks to build strength into your borrowing skills.

Your first step to creative financing is to analyze your financial lacks and shortcomings.

Creative financing can give you Assets, Income and a Base on which to build a solid future.
Options allow you to get real estate, in many cases, with no credit check.
Look for assumable mortgages; they can be your key to creative financing.
Government loan guarantees can mean the difference between approval and rejection.
Flipping real estate can give you an income with little credit investigation.
Section 8 tenants can keep you income property 100 percent filled.
Always try to mortgage out—it’s the premier creative financing technique.

###





How and Where to Get Loans to Build Your Real Estate Wealth by Tyler G Hicks Part IV - To learn more about this author, visit Tyler Hicks's Website.

Like this article? Share it with your friends

Article Feedback
 Article Feedback No article feedback found.
  Leave Your Feedback
article feedback

Article Feedback
Richard Jefferies
For an online Car Loan Calculator and finance for a cheap car loan. Get approved on car loans or car finance in Australia with cheap bank car loans and finding a car finance broker. Commercial car loans including business car finance and car lease. Car Loan Calculator has information on finance companies and getting the right cheap car loan from banks at best car loan rates and a online car loan calculator for all finance in Australia. Get the best car finance with our help at Car Loan Calculator and Finance Ezi. - Visit Richard Jefferies's Website

David Barr
David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website

Staging Diva
Debra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website

Evan Carmichael
I've created this section on my site to share some of the incredible tools that I've used to build my business. I hope you too can benefit from them and look forward to hearing your feedback on the reviews! - Visit Evan Carmichael's Website

Jay Kubassek
(Jay's Full Bio: EvanCarmichael.com/jaykubassek)  In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.

 

As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)

 

Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. 

 

Jay resides in NYC with his wife Jamie, son Milo and dog Cooper.  Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website

Leanne Hoagland-Smith
Are your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website

Dianne Crampton

Dianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here.

Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009.  Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010.  To receive publishing discounts, subscribe to the free TigerTracks Newsletter here.

- Visit Dianne Crampton's Website


To learn more about the Evan Elite Author Program please contact us.

About The Author


Tyler Hicks
(Visit Tyler's Website) Tyler G. Hicks is president of International Wealth Success, Inc. (IWS), and a director on the board of a large New York-based lender. A consultant to entrepreneurs and real-estate investors around the world, Tyler is author of many books on real estate and business, some of which have appeared on the best seller lists of Business Week, Walton Books, and other national publications. Several of Tyler's books have been ranked among "the top ten real estate books of the year" by columnists in the Washington Post and Los Angeles Times. Tyler's bestselling books include How to Acquire $1-million in Income Real Estate in One Year Using Borrowed Money in Your Free Time and 203 Home-Based Businesses That Will Make You Rich. On this site you'll find articles Tyler has written to help the "beginning wealth builder" start making money in income real estate or in a small business they can call their own. Tyler hopes that "experienced wealth builders", too, can get new money-making ideas and a more positive mental attitude from his contributions. You can visit Tyler's Web site to learn more at iwsmoney.com.

Tyler Hicks is a Gold author on EvanCarmichael.com
About The Author

View Author Blog
View Author Blog

View Author Video
View Author Video

Free Downloads


Tyler Hicks's

Complete
List Of
Small-Business-Loans
Articles

Name
Email
If you enjoyed this article, get Tyler Hicks's Complete List of Small-Business-Loans Articles For FREE!

More Tyler Hicks
USE LETTERS OF CREDIT LCs TO GET FINANCING
How and Where to Get Loans to Build Your Real Estate Wealth by Tyler G Hicks Part IV
How and Where to Get Loans to Build Your Real Estate Wealth by Tyler G Hicks Part III
EXPORTER LOANS ARE OFFERED BY HUNDREDS OF LENDERS
SPORTS FACILITY FINANCING IS EASIER THAN EVER
COMPENSATING BALANCE LOANS FOR BUSINESSREAL ESTATE
FAST MONEY SUCCESS FOR YOU
USE DOWNSIZING TO UPSIZE YOURSELF
TIPS FOR MAKING MONEY WITH REAL ESTATE YOU DONT OWN
SUCCEED WITHOUT TONS OF EXPERIENCE
Free Downloads


 
 
 


Evan Elite Authors
Linda Richardson  
Joe Dager  
Dave Kurlan  
Evan Elite Authors

Become An Author
Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details.
Become An Author

Evan's Latest Video
Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media
Evan's Latest Video

Business Opportunities
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"

How to Start An Online Business

Click Here To Learn More
Business Opportunities



Evan's Newsletter
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
Name:
Email:
Evan`s Newsletter

Free Downloads
Business and Income Icon Business and Income
Future Networking Icon Future Networking
Business Plan Sample Icon Business Plan Sample
Why Business Owners Quit Icon Why Business Owners Quit
Succeeding In A Down Economy Icon Succeeding In A Down Economy
Free Downloads - Complete List

Entrepreneur Tools and Guides
The Top 10 ProBlogger Posts - Best Posts for Bloggers
The Top 10 ProBlogger Posts
Best Posts for Bloggers
 
Top 50 Marketing Blogs
Top 50 Marketing Blogs
Top Marketing Blogs of 2010
 
Entrepreneur Tools and Guides

SEO For Africa
SEO For Africa
Ramatou Djeri Agoe, Togo,
Ramatou Djeri
Agoe, Togo
SEO For Africa

If I Were A Startup...
Jeff Roick, $1.4 to $6.5 Mil in 2 years
Jeff Roick
$1.4 to $6.5 Mil in 2 years
Catherine Daw, > $4 Mil in revenues
Catherine Daw
> $4 Mil in revenues
If I Were A Startup... - Complete List

Famous Entrepreneurs
John Willard Marriott, Marriott
William Hewlett David Packard, Hewlett-Packard
Famous Entrepreneurs - Complete List

Entrepreneur Advice
Paul Kedrosky, Venture Capitalist
Paul Kedrosky
Venture Capitalist
Keith Ferrazzi, Never Eat Alone
Keith Ferrazzi
Never Eat Alone
Entrepreneur Advice - Complete List

Popular Articles
(Premium Authors)

     Seven Habits of Highly Defective Sales Managers
By Barry Maher
     Speaking of Motivation Leadership and Success
By Barry Maher
     Bragging about the Negatives and Speaking of Positive Sales Motivation
By Barry Maher

Have A Suggestion?
Toronto Salsa Classes / Toronto Salsa Lessons Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
Have A Suggestion?

More Evan Carmichael
More Information