Educating the Public on
Responsible Investment
You will learn how to understand the basics of investing. There are two categories that investments fall into, financial/paper assets and real/tangible assets. Financial assets can easily be turned into cash because they can be sold or accessed quickly. Some examples of financial assets are bank deposits, money market accounts, stocks, bonds, and mutual funds. The other category is real assets that include raw land, rentals, or other physical forms of real estate. Real assets take longer to sell and therefore take longer to access cash.
Some Real Estate
Investment Strategies
*The pyramid diagram is used for information purposes only.
It should not be considered as investment advice.
Investment Risk Pyramid
What Does It Mean To Buy A Tax Lien/Deed
A tax lien is when you or someone pays tax on a property and you receive a certificate showing that you paid the property tax. If the rightful owner pays the back taxes, you as the lienholder earn a very attractive interest rate. The interest rate can be considerably high. It can be anywhere from 12% to 24% sometimes less sometimes more, it depends on the state. If the rightful owner fails to pay the back taxes, and you are the lienholder you could become the new owner. The possibilities can be exciting, but research the property first. If you don't know what you paid for you could end up with a piece of sidewalk or landlocked property.
A tax deed is when the county seizes your property and sells it. You may be buying a piece of property for well below market value.
Savvy investors know that there will be a handful of properties being auctioned with 3 times the number of investors. Experienced investors have the upper hand over novice investors because they researched the properties prior to the auction. Skillful investors will usually win the bids on the best properties
Turnkey Real Estate Investing
Turnkey real estate investing is when a property management company resells their property to investors and then manages it for the new buyers. These properties are usually located in low-income, distressed areas. Novice investors prefer turnkey investing because of the simplicity of having someone else managing the property for them.
Trust Deeds
It is an agreement between a borrower and a lender. The property is held in trust by a third party until the loan is paid in full. Some states allow this in lieu of a mortgage. Trust deeds are also a popular investment tool that allows you to act as a lender/investor to a builder/developer. For example, it could be residential, commercial, or other forms of real estate.
Depending on several factors, returns can range anywhere between 8%-20%. Why would a developer pay such a high rate of return? Because they may not be able to get a traditional loan from a bank at a lower rate and are willing to pay a higher rate.
Investors usually get paid monthly until the principal is paid in full. The loan average is around 9 months, but it can range anywhere from 3 months to 2 years. They are sometimes used to help season the investment before a commercial bank would give a loan at a much lower interest.
Reach Out Today
Learn how to understand the basics of investing.
If you are interested in learning more read our blog pages.