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Chapter 1

Introduction to Real Estate Financing

Knowledge is power. - Francis Bacon

In 1991, I made my first attempt at financing an investment property through creative means. With a lot of guts and a little knowledge, I made an offer that was accepted by the seller. I tendered $1,000 as earnest money on the sales contract, then proceeded to try to make the deal work. I failed, lost my $1,000, but I learned an important lesson - a little knowledge can be dangerous. I decided then to become a master at real estate finance.

Financing has traditionally been, and will always be, an integral part of the purchase and sale of real estate. Few people have the funds to purchase properties for all cash, and those that do rarely sink all of their money in one place. Even institutional and corporate buyers of real estate use borrowed money to buy real estate.

This book explains how to utilize real estate financing in the most effective and profitable way possible. Mostly, this book focuses on acquisition techniques for investors, but these techniques are also applicable to potential homeowners.

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Chapter 1 Does Warren Buffett Trade?

My favorite holding period is forever. - Warren Buffett

First, I have to apologize in advance. This book barely mentions Coca-Cola or the Washington Post. I also don’t really talk about the many fine companies that Berkshire Hathaway has bought over the past three decades (See’s Candies, the Pampered Chef, Dairy Queen, National Furniture Mart, and others). There are many excellent books that cover these topics. And while Warren Buffett has made billions of dollars from these investments, I don’t think I can add to the already great dialogue that has taken place on these topics.

Nor is this book really about value investing. There are many definitions of value investing and many treatises on value versus growth. But even Buffett has stated that on the whole, the distinctions between value and growth are nonsense. This book is about the various ways that Buffett has applied the concept of “margin of safety” outside of his buy-and-hold strategies. He has had a longer and more diverse investment career than just about anybody. There are several people in the world (fewer than ten, actually) who have had more years’ experience than Buffett at picking stocks, but I can think of no one who has traded and invested with a more diverse group of strategies over the past fifty years. It is these strategies that I write about. Many of them are normally thought of as “trading” strategies instead of the buy-and-hold investing for which Buffett is famous.

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In order to sell a home in many places throughout the country, sellers need their homes to outshine the competition, must be very negotiable on price and be prepared for a months-long stretch on the market. It’s enough to make some sellers sit this season out, waiting for conditions to improve.

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Tags: sell+or+remodel

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Anyone in danger of losing a home to foreclosure would do well to seek help early, be proactive and get balanced advice.

I recently attended a Boz Scaggs concert. Had a great time. Now, you ask, what does that have to do with the foreclosure crisis? Great question. For some reason, rocking to the words in "Lowdown" got my mind wandering to today’s troubles. O.K., it’s a little weird, but what floated through my head was: Where can you get the lowdown if you might possibly be in trouble?

The thought stuck. Foreclosure is a scary thing, and you want to get in front of it. You want fast, friendly and effective advice - and that may not come from your original lender. I checked out the options the day after the concert.

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Tags: foreclosure

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Sister has come into wealth, and everyone wants it!

Dear Dave, My sister recently received a large sum of money through an inheritance. Everyone seems to have a different idea about what kind of how she should invest it. The last two or three people she’s talked to have recommended municipal bonds. What do you think? Rudy

Dear Rudy, Boy, how many times have I heard this story? You get a little money and the sharks start circling.

Municipal bonds aren’t the best or the worst investments you can make. They’re tax-free income, and their yield can be just as good - or better - than corporate bonds or T-bills. But municipal bonds can be volatile just like any other kind of bond. If a city gets into financial trouble, you can easily lose money in the deal.

Raed more at Questions and Answers About Municipal Bonds and Real Estate

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In the case of foreclosure investing there are a few cornerstones that can literally change your business life overnight, one is to find the right mentor or advisor, and two, following the right system (one that makes your money). Other than that the biggest hurdle to getting started is quite simply the funding required and your own motivational levels.

However one of the greatest things about real estate investing is the fact that you have the greatest amount of leverage compared with many other types of investing or businesses such as stocks and paper assets.

Read more at Real Estate Foreclosure: Back Door Profit Generators For The Rest of Us

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So you’ve taken the plunge and either have been trying to make foreclosure investing work for you or your still on the fence and wading in the pool trying to get a feel for the waters as it were.

You don’t feel overwhelmed by the seemingly endless supply of strategies and terminology involved in foreclosure investing and in real estate in general.

One of the primary factors in determining your success in foreclosures and in business in general is in the market research. Let me put it this way: you have to be able to spot and analyze whether a deal is a deal or not. Now I can probably ramble for hours on all the different nuances strategies, opinions, schools of thought, gurus, books, etc.

Read more at Real Estate Foreclosure: Getting Wet With Your First Deal

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Whether you are looking for a nice vacation home or a permanent home where you and your family can relocate, Bali is worth considering. Bali has a lot to offer to real estate buyers, from white sand beaches to scenic gardens and parks. All these will sure entice you to stay longer and possibly live in this paradise.

Bali is, beyond doubt, a delightful place. Here you can access beautiful beaches, distinctive cultural experiences, a warm climate, and a full support of resident American communities. That is why more and more people are finding it sensible to buy real estate in Bali not only as a vacation home, but as a permanent residence.

Raed more at Bali Real Estate

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One of the most important considerations you will need to make in regards to your real estate holdings and your estate includes tax planning. If not handled properly, your estate could end up getting hit with significant losses due to taxes after your demise. To protect yourself and your estate against this possibility, it’s important to plan for your real estate with estate planning.

First, it’s important to understand exactly what estate planning is and what it is not. Estate planning goes far beyond the simple drafting of a will. In essence, an estate is the total property, both real and personal, that is owned by an individual prior to distribution through a trust or a will. The act of planning your estate involves distribution of the real and personal property to your heirs, taking into consideration all the applicable laws, regulations and possible tax considerations.

Read more at Planning for Real Estate with Estate Planning

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For Americans buying their dream property in Mexico, it’s important to understand the differences between Mexico’s real estate system and that of the United States. It’s never safe to assume that any law or process is the same between the two systems, and oftentimes they are completely different. There are a few key differences to be aware of between purchasing properties in the U.S. verses Mexico to ensure a seamless transaction.

Read more at A Guide to Purchasing Real Estate in Mexico for Americans

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