Sunday, 1 September 2019

Chapter One

Chapter One

Real Estate 101 Knowledge is power and with real estate investing the more knowledge you have, the more successful you can be. 

You don’t need a college education to hold a diverse, performing portfolio; however, knowledge of how the market works and knowing the demographics will help tremendously for making solid investments.

 Many interested in the possibility of investing in the real estate market have likely read about Warren Buffet, Tony Robbins and Jason Hartman, all successful real estate gurus. 

While they each have their own secrets to success, they are cashing in on the most tax-favored asset in the world — income property. 
These three real estate gurus, and many more, started at the beginning. Diving into the market without first learning the how-to’s is too big a risk to take, especially if you’re investing your retirement fund. 

You need to be on solid ground and that means knowing everything there is to know about real estate investing. This book will teach you how to be a savvy real estate investor and build a diverse portfolio without breaking the bank. The importance of Real Estate Investment Education Understanding key terms The first step for new investors is to learn the terminology used in real estate. Adjustable rate mortgage, amortization, appraisal, contingencies, equity, and private mortgage insurance are some of the words frequently used in real estate transactions. Knowing the jargon is important so when brokering your first deal, everything is understood. Real estate closings can be complicated, with a lot of legal talk and plenty of paperwork to read over and sign. Although most investors have a lawyer to handle closings, you’ll still need to sign all the necessary paperwork and understand exactly what you’re signing and why. An example of the importance of understanding the terminology can be found with private mortgage insurance, more commonly known as PMI. 
This insurance is a monthly premium tacked onto a mortgage to guarantee the loan. PMI insurance is often required when the lender has an average or below average credit score. If you sign an agreement you don't understand, it can put your investment portfolio in jeopardy, therefore knowing exactly what is said and what is signed is paramount.

The following are words you will frequently hear: Adjustable-rate mortgage An adjustable-rate mortgage means the interest rate can change over the course of the loan at five, seven, or ten year intervals. Amortization Amortization combines interest and principal into monthly payments, rather than paying off the interest at the start. Appraisal An appraiser will determine the value of a home based on a physical inspection of the property. 

Areport is passed on to the lender to ensure the property meets or exceeds the lending price. Assessed value The value of a home based on the assessment of the jurisdictional government. The amount of property taxes levied is determined by the assessed value.