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Real Estate Is Not Real Estate: It’s Creative Finance

The week I wrote this section, I
bought and sold four properties. I closed on two in a single day and had
three under contract for the following week. I’m a full-time real estate
investor.
My job and your job is to find a deal and put it under contract. Learn all
the ways to make money: buying real estate, creative finance, flipping
properties, lease-optioning real estate, mortgage brokering, and money
brokering. Then choose which way you like the best and run with it.
Real estate is unique in that you can get into it without using any of
your own money.


Have you ever tried to get in the stock market and make money? It can
work; however, you have to buy a stock at the price it sells for on the
day you buy. Let’s say the price of a company’s stock is $100 a share. If
you want to buy it, you have to pay $100 and pray it goes up. If it goes
to $120 in a year, you’ve made $20 for every $100 you spent on that
stock. That’s a 20 percent return on your investment, which is a good
return.
You must be able to take into account that, historically, the stock market
has between about a 9 and 13 percent annualized return—an average of
11 percent over the past 40 or 50 years. So if you’re making 11 percent
or more, you’re doing great in the stock market. Unfortunately, for
many, their stocks have gone down 10, 20, even 30 percent in the past
few years.
However, to buy that $100 stock, you have to give the bank or brokerage
firm (or whoever makes the transaction for you) a commission, plus
you have to determine where that $100 comes from. If you have excellent
credit, the brokerage may lend you half of the $100 and you still
have to put up $50 of your own cash. That’s what some people do when
they invest in the stock market. Considering commissions and borrowing
expenses, how much are you really making on the appreciation of
that stock?
I recommend you consider investing in real estate for a better, longterm
investment because of the features that make it unique, some of
which follow.
SECRETS OF BUYING AND SELLING REAL ESTATE