Cash Opens Doors

            Cash opens doors which are not available to investors which depend on securing a loan to purchase a property. This for several reasons is a true statement, but a word to the wise they say is sufficient. Be careful the door your open does not lead to ruin. Linding institutions are not in business to help people purchase items they desire; they are in business to earn a living. Even the non-profits have to earn a profit in order to stay afloat.  Therefore, they do not lend on properties which would be hard to clear from their books. However, these properties are less costly to purchase. There are less costly because of a few reasons:

• The law of supply and demand come into play here because 85% -95% of the potential buyer are illuminated because the lenders are not willing to risk becoming stuck with a declining hard to move asset. When you borrow to purchase a property, it is the lending intuitions asset and your liability. The smaller volume of potential client causes the price of the property to be reduced until a fair market value is reached.
• These properties require more work to make them livable. They take longer to rehab and tie up capital longer which also reduces the potential buyers.

These properties fit in to the ROI method quite well, but they should not be attempted by the novice property investor. With experience come knowledge. When we begin investing, we will make mistakes. A costly one could destroy our hopes of profits from real estate investing. The reason many financial advisors tell the client to diversify their capital is because it’s harder to lose it all if it spread out over several investments. Even a broken clock is correct twice a day. This means if you have succeeded in purchasing several income instants before you are more likely to have learn some important lessons such as:

• Everyone who you hire will not perform as required.
• It is easier to write your plan of attack than it is a accomplish it
• There will be discoveries in most improvement projects

It is important to have your team members in place when you purchase one of the properties which is unhabitable; your team is unlikely to be in place until after you’ve rehabbed a few properties. There is a time and place to pursue these properties, it not at the rest estate investor beginning. I believe it was Nipsy Russel who said, “Don’t worry, don’t hurry it’s better to get to the golden gates a little bit late than to catch hell on time.” Cash opens doors because the risks and rewards are greater on properties which cannot qualify for a loan.

Note: Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California.