November 4, 2010

There are lots of ways on how to make money on real estate that’s why people have started investing in this business venture. And in order for you to succeed, you need to know how the system works and you should expect that things will not come easy unless you put some effort and hard work. Real estate has the potential to bring you more money but take note that it will take time and you will face several challenges and not to mention that you will have much competition in this field. However, if you sit down and learn the ins and outs of real estate investing, you will find it worthwhile. So here are some of the things you must acquire and need to know on how to make money on real estate notes.

Cash. You should have your source of funds readily available for your investment. Especially when you bid for a property, you must at least have your money on hand to purchase the property that you want to invest in. But if you don’t have enough funds, you can set up a line of credit with a bank. This may take a while but a really big help if you have your cash ready and you will be able to get ahead of your competitors.

Goals. You need to know what your goals are. This will save you time and the seller of the note if you know the minimum return that you need in advance.  Learn how to make money in real estate notes by purchasing them at a discount.

Cost. Find out your costs. You have to know if you can do things on your own like manage your collections or if there is a need for you to outsource it. And if you will outsource, how much will it cost you? And all the other questions you need to answer in order to determine the costs in running this investment.

Locate Notes. There are several sources where you can find notes to purchase, like private lenders, mortgage companies, newspaper ad on real estate finance, escrow companies and you can also find it online.

Note assessment. The real estate note assessment may be the trickiest part of the process and you will need the expertise of someone who has more knowledge in the area such as a mortgage lender to do the evaluating. So a note is considered critical if it includes a trust deed. And it must be valued if it is a land sales contract. The property must be valued accordingly depending on its market value and present condition.

Attorney. It may be worth some money and may seem expensive but you can use it repeatedly if you will have a real estate attorney help you draw a sales contract.

These are a few of the things you will need to know on how to make money in real estate notes. Remember that by doing your research will always help you be prepared and wise in making good decisions on your investment and  future endeavor.