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How to Acquire Real Estate

By Charles Hopkins Published 09/19/2006 | Entrepreneur

How to Acquire Real Estate

In todays economy there is one area of financial planning that seems to continually be heating up. Real estate is becoming an appealing way to make money but if you dont already have a large bank roll to work with, you may think that you cant participate in this money making venture.

People are actually making hundreds of thousands and even millions of dollars in real estate without investing a single penny of their own money. These individuals are just like you and I except for the fact that they are risk takers. They recognize that by using other peoples money to fund their real estate ventures that they may end up owing much more than they have the capability to repay.

The premise of doing business this way is simple. The person who wants to make a small or large fortune in the real estate market becomes involved with private investors. Private investors are wealthy individuals who are willing to fund the investments of private individuals at a reasonably high interest rate.

They supply the funding and the private real estate investor purchases a property with the intention of turning it over. This means that they purchase a property that they believe they will be able to sell within a short time frame for a profit. Then they pay back the private investor the principal sum plus any interest owed and they pocket the profit.

They will use this same approach over and over again, sometimes working with the same private investor, other times working with several. They acquire real estate on a steady basis that they then turn around and sell. Its a smart approach to making a living buying and selling.

The idea has been in existence for years and many people believe only those who have already proven themselves successful in the real estate market can benefit from it. However, you can actually get started purchasing and selling real estate using this approach regardless of your experience in the arena.

Private investors are constantly looking for individuals needing a loan. The reason is that they see these short term, high interest loans as a great investment. They could go the traditional route of investing in stocks, bonds or their own real estate however all of these require one thing that many wealthy individuals dont possess and that is patience.

It benefits the private real estate purchaser greatly because they can quickly and almost effortlessly get their hands on large sums of money without having to wait for the approval of a traditional lender.

There are several ways to locate private investors and its important that you have a good understanding of the legalities of doing business this way. Its also wise to have a strong grasp on the current trends in real estate as you dont want the burden of a high interest private loan hanging over your head while you are trying to sell a property in a poor market. However, if you have been following the market for some time and youre ready to become more than just an onlooker, consider using the services of a private lender.