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And Investor A is paying $12,000 because he believes he can make more than that on the deal, since there's a full $70,000 of equity. This deal between Investor A and Investor B is called an 'Assignment', because Investor A is assigning the contract to Investor B. Third, Investor B does his 'due diligence' to confirm that the deal is as good as he thinks it is. Finally, Investor B closes the purchase of the property, and Investor 'A' receives the assignment fee from Investor B. This is, obviously, a simplification of the process. Article: Consider these parameters for a real estate deal: Property Value: $250,000 Purchase Price: $160,000 Repairs: $2,500 If you analyze the numbers, you see that the equity forsaken in this deal is $87,500 (Property Value minus Purchase Price minus Repairs). So here's a hypothetical question for you: overweening that the information on tiptoe is accurate, and the property is located in an area that you view as OK and/or favorable, then: If I offered to give you this deal in exchange for $10,000 in cash, would you do it? Remember - this is hypothetical. The real question here is this: Would you exchange $10,000 in cash for $87,500 in equity? For most smart investors, the acknowledgement is: rigidly YES! And this is titled 'Wholesale Real Estate Investing' - the process of shopping a lot of equity at a very significant discount from contributory real estate investor who has before done the hard work of finding a deal and getting it under contract. Just think hereabout that - consider how easy real estate investing would be for you if you had a network of real estate investors in your area (and maybe all over the country) who, several times each month, offered you the opportunity to purchase significant amounts of equity for a severe discount... ...It would be quite easy to come wealthy, wouldn't it? The solving is: Yes, it will. You've got to lift temporarily - it will be a pretty wonderful thing when you know how to find great real estate deals in which you can trade a small strength of cash for a large shadow of equity without even having to find the deal yourself... ...and that's exactly what wholesale real estate investing is all about. Wholesale real estate investing is conceptually very simple. Here's how it works: First, 'Investor A' finds a great real estate deal with a lot of equity. Typically, Investor A will have spent a significant expanse of time, money and expertise to find the deal, negotiate the term and get the property under contract. By putting the property under contract, Investor A now has control of the property, and the equity in the property. (For this example, imagine that Investor A has found a property worth $200,000 and has set a purchase price of $115,000 and he also knows that there are $15,000 in repairs, which leaves an equity position of $70,000). Second, 'Investor A' finds further party, 'Investor B'. Investor B recognizes that the contract that Investor A has established is worth $70,000 in equity, and so he strikes a deal with Investor A to turn the deal over to Investor B in exchange for some run into of cash (we'll use the value of $12,000 in this example). So Investor A is giving up $70,000 in 'potential' profit in exchange for $12,000 in current profit. And Investor A is paying $12,000 now he believes he can make more than that on the deal, since there's a full $70,000 of equity. This deal Investor A and Investor B is titled an 'Assignment', insomuch as Investor A is assigning the contract to Investor B. Third, Investor B does his 'due diligence' to confirm that the deal is as good as he thinks it is. Finally, Investor B closes the purchase of the property, and Investor 'A' receives the trust fee from Investor B. This is, obviously, a simplification of the process. But this is essentially how it works - not so difficult, is it?
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Advice Home Business Technology Online Advertising Motivational Internet Marketing SEO Help Online Games Science Articles Happiness More Articles:1. I Wonder Why Dictionaries Went Out Of Fashion Summary:More Tips For New Writers (Part IV)When you begin writing for your home based business, never lose sight of the following facts:1. I used to work for a lawyer who had a selection of favourite words and phrases which he would drop into correspondence or conversation in order to impress people. How much good do you think it would do your career to impart to your boss the information that he appeared not know the meaning of a word he used on… 2. Learned Any "Secrets" Lately? Summary:Learned Any 'Secrets' Lately?by Cathy BryantCopyright 2002http://www.homebizjunction.comI mean, REAL secrets about business success - the ones that will make you rich?You know as well as I that there really isn't any such thingas a secret - just a truth that you haven't discovered yet.(I read that somewhere and I don't know who said it - but itis profound).The SECRET is - discover your own truths - the ones that will help grow your busine… 3. Are You Afraid to Sell? Summary: Simply put, it refers to the principle that, in order to be successful in business, especially an online business since the Internet is such an anonymous medium, you need to establish a relationship of trust with your prospective customers before you can expect them to do business with you. At the end of the day, though, if your business is to be financially successful (and if you don't care about that, you're engaged in a hobby, not a b… 4. Should I Be My Own Boss? Summary: Your success will always reflect your efforts'don't ever forget this.WHEN DOES IT PAY OFF?Every time you make a sale, the immensely exciting feelings you get will pay off more than the money you make from the sale it's self.When you can choose your hours, choose your days off, choose your vacation length and choose your salary'this is when your home business has truly paid off.SOUNDS WORTHWHILE'- BUT - Being straightforward again, genera… |