Making Millions From Real Estate

Income producing real estate is one of the best methods you can use to get rich. The best time to get started in real estate investing is when the economy is bad.

There are so many advantages to owning real estate as an investment that you should give it serious consideration even if you do not plan to use real estate as your primary source of wealth building. Here are the first five advantages.

1. Real estate can generate a cash income.
2. Real estate can produce equity growth.
3. Tax advantages can reduce your tax liability.
4. You can use leverage when financing the purchase.
5. Real estate can give you protection against inflation and deflation.

You will learn even more ways that your real estate investments can make you money as you go through this topic.

Real estate is a huge market, everyone occupies real estate everyday, and most people own some. I will cover in this real estate section is what I have learned during Fourty five years of real estate investing, some formulas I use to value the deals, and some of the first hand accounts of deals that have been done that will hopefully help you.

I will also cover some different methods of investing in rental properties, some of which you will not find in books. Such as renting buildings without the land, trailer home rentals with and with out the land, and how those people who put the signs up that say "we buy houses", operate.

We will touch on; the types of real estate investors, timing, closings, improving properties, secrets of real estate investing, options, real estate math and formulas, profits, financing, leases, notes, taxes, and much more.

If you plan on owning a small business, you will find that a lot of the value that you build up in your small business over time will be in its real estate holdings. The borrowing power of your small businesses, and you as an individual, is greatly increased if you own real estate.

There are more advantages to investing in income producing real estate than any other investment vehicle I can think of. There are some great books on real estate investing, and we list several in the appendix for your consideration. Some of these are out of date but the basics have not changed, only the tax laws.

Real Estate Helped Make America Great: The property ownership system and laws in the United States helped build this great country.

Let me give you an example: In most third world countries the quality of the government, and its laws, and the record keeping is so poor as to make it difficult, or impossible to prove who owns the real property. The inability to prove documented ownership makes it virtually impossible to borrow to finance a home, or to borrow on the real estate's value for any other purpose. This fact is one of the reasons people living in third world countries have a hard time improving their lot in life.

Most people and small business owners in the United States have a large percentage of their savings tied up in their homes and business real estate. They can access that savings by borrowing against the property or selling it.

We are lucky in that we live in a country were real estate is considered one of the safest investments available. You can use that trust in our system to make yourself rich.

Advantages of investing in income producing properties.

Income or cash flow: A properly structured real estate deal can produce current income, and that income increases as the value of real estate and rents increase.

Tax Savings: The IRS tax rules and tax laws in the US, allow you to take depreciation on the structures on a property. You can deduct the interest on the mortgage, and deduct the operating expense against the income generated from the property. If this produces a taxable loss, you can possibly use that loss to reduce your earned income. Other tax rules allow you to postpone the taxes on the long-term gains on property. Note: Deposit all money borrowed for investment in a separate bank account. In order to deduct the interest on the borrowed funds you will need to show the money was used for investments.

Leverage: Using a small amount of your money, you can borrow other peoples money (OPM) to finance a property. By borrowing, you can control a larger property with a larger income stream than would be available from a smaller property that you paid cash for.

OPM "other peoples money" Using other peoples money is easier to do in real estate transactions than in most any other investment. OPM is used to finance the investment, and the rents from the property pays down your mortgage increasing your net worth over time.

Equity Build up: Each time a payment on the mortgage is made the principal portion of that payment increases your net worth. This is the real magic of real estate investing. Your money working for you, and other peoples money working for you.

Flexibility: There are many ways to buy, finance, control, and dispose of real estate. Such as mortgages by the VA, FHA, owner carry notes, purchase money mortgages or deed of trust, wrap around mortgage, blanket mortgage, and rent to own, to name a few.

Appreciation: A properly maintained property will increase in value over time. The more desirable the area your property is located in, the faster the appreciation. If an area declines, trade your way into a better area.

Inflation Protection: Real estate has historically increased in value at, or higher than the inflation rate. The rental income can be increased as prices, in general increase, thus protecting your cash flow from inflation.

Readily Available: Real estate is everywhere and limited at the same time. As you have heard before, location, location, location. Plus a whole industry awaits to serve your needs - agents, bankers, appraisers and title companies.

"This one thing I do well, for it is my obligation to myself" Jim Glasgow

Here is a link to CoStar a very good commercial Real Esatae newsletter http://www.costar.com/