FinancingeRealeEstateeInvestmentseForeDummies ®
Publishedeby
Wiley e Publishing,e Inc.
111eRiver eSt.
Hoboken,eNJe07030-5774
www.wiley.com
Copyrighte© e20 09 eby eWi ley ePu blis hin g, eIn c.,eIn dianapo lis, eIn dia
nae Publishede by e Wiley ePub lishin g, e Inc., eI ndian apo lis, e Indi an ae
Publishedesimult an eous ly ei ne Can ad a
Noe parte of e thise publicatione may e bee reproduced, e storede ine ae retrievale system e or e transmitt ede ine any e for
m e or e by e any e means,e electronic, e mech anical, e photocopying, e recordin g, e sc annin ge or e other wise, e exc ept e as
e permit-
e tede under e Sections e 107e or e 108e of e thee 19 76e Unitede Stat ese Copyrigh te Act,e without e eith er e the e prior e writte
ne per-e missione of e thee Publisher, e or e authorizatione throughe p aymente of e t hee appropriatee per-
copy e feee toe thee CopyrighteClear anc eeC ent er,e222eRos ewoodeDrive,eD anvers, eMA e0 1923,e (978 )e75 0-
8400,efaxe(978)e646-
8600.e Requestse toe thee Publisher e for e permissione shoulde b ee ad dress ede toe th ee Permissionse Departm ent,e J
ohne Wiley e &eSons,eInc.,e111eRiver eStreet,eHoboken,e NJe0703 0,e(201) e748-6 011,ef axe (201 )e7 48-
6008,eor eonlineeate http://www.wiley.com/go/permissions.
Trademarks: e Wi ley,et he e Wiley e Pu blis hin ge lo go, eFor e Du mmies, et he eD ummi ese Man elo go,eA eR efer enc eefor e
thee Resteof eUs!,e Th ee Dummi es e Way, eD ummiese Dai ly,e Th e eFu ne an de Easy e Way,e Du mmies. com, eMaki ng e Ev
erythinge Easier,e ander elat ed etr ad ee dr ess ear e etr ad em arks eor er egist er ed etr ad em ark s eof eJoh ne Wiley e& eSon
s,eInc.eand/or e its eaffi liat es ein eth ee Unit edeSt at es eand eot her eco un tries, e an dem ay e not eb ee us ed ewit hou te writt
enepermission. eAlle ot her etr ad em ark s e ar eet h eepr op erty eof e th eir er esp ec tive eow n ers. e Wi ley e Pub lishi ng, eIn c.
,eisenoteassociat ede with e any e prod uct eor ev endor em entio n ed einet hise book.
LIMIT e OFe LIABILIT Y/ DISCLAIM ER e OFe WARR ANT Y: e THEe PUBLISH ERe ANDe THEe A UTHORe MAKEe NOe
REP-
e RESENT ATIONS e ORe WA RR ANTIES e WITH e RESP ECT e T Oe TH Ee ACCURA CYe ORe COMP LETENESS e OFe
THEe CONTENTS e OFe TH IS e W OR Ke A NDe SPECIF ICAL L Ye DISCLA IM e AL Le WA RR ANTIES,e INCLU DING e
WITH OUT e LIM ITA TIONe WAR RA NT IES e OFe FITNESS e F ORe Ae PART ICU LAReP URP OS E.e NOe WAR RA NT
Ye MA Ye BEe CR E-
e ATEDe ORe EXTENDEDe BYe SA LES e ORe PR OM OT IONA Le MAT ER IA LS.e THEe A DV ICEe A NDe ST RAT EG IES e
CON-
e TAINEDe HEREINe M A Ye NOT e B Ee SU ITA BL Ee F ORe EVER Ye SIT UA TION.e THIS e W ORKe IS e SOLDe WITH e T
HEe UNDERS TA NDING e THA T e THEe PUB LISH ERe IS e NOT e ENG AG EDe INe R ENDER ING e LEGAL ,e ACCOU NT
ING ,e ORe OTH ERe PR OF ESSIONA Le SER VICES .e IFe PR OF ESSIONA Le ASSIST ANCEe IS e REQUIRED,e TH Ee SE
RVICES e OFe Ae COMP ET ENT e PR OF ESSIONA Le PERS ONe SH OU L De BEe S OU GHT.e NEITH ERe TH Ee PU BL IS
HERe NORe TH Ee AUTH OReSHA LLe BEe LIABL Ee F ORe DA MA GES e AR ISING eH EREFR OM. eTH EeF ACT eTHA T
eANe ORGA NIZA TIONe ORe WEBSITEe IS e REFERR EDeT Oe IN eTHIS e W OR KeAS eAe CITAT IONe AND/ OR eAeP
OT ENTIA LeS OUR CEe OFeF UR -
e THERe INF OR MAT IONe DOES e NOT e MEA Ne THAT e TH Ee A UTH ORe ORe TH Ee PU BL ISHERe ENDORS ES e T
HEe INFORM ATIONe THEe OR GA NIZA TIONe ORe WEBSIT Ee MA Ye P ROVIDEe ORe RECOMM ENDAT IONS e I
Te eMA
For Ye MAKE.
general einforme Fatio
UR THER, e R EA
neo ne our DERS
e oth e SH
er epro ducOUL
tse De BeEseervices,
and AW AR E THAT
epe leas INTact
eece ont EReNET Wstom
o ur eeCu EBS IT
er ES e LIST
e C ar EDartm
eeD ep e INeen
teTHIS e Wethe
within OReK e MA
U.S. eateYe HAVEe CH
877-762- 297A4,NG EDe OR
eoutsid DISAPP
eetehee U.S.eatEA RED572-
e 317- e B ETW EEN
399 3, WHe3EN
eoreefax e TH
17-5 72-IS e4002.
WORKe WAS e W RIT T
ENe ANDe WHENe IT e IS e REA D.
For etechnical esu ppo rt, ep lease evisit ewww.wiley.com/techsupport.
Wiley ealso ep ub lish esei tse books eine a evari ety e of e electro nicefor mats. eSom e eco nt en tet h ate ap p earsein epri nte
may e notebeeavai lab le eine electr onic ebook s.
Library eof eCongresseControleNumber:e200992 1030e IS
BN:e978-0-470-42233-5
Manufacturedein eth e eUnit edeSt at es eof eAm erica
10e 9e 8e 7e 6e 5e 4e 3e 2e 1
,About the Authors
e e
RalpheR.eRoberts,eCRS,eGRI,eis eaeseasonedeprofessional eineall eareas e
ofereal eestate,eincluding ebuyinge andeselling ehomes,einvestingein ereal e e
state,eandebuildinge and emanagingereal e estatee agenteteams. eHee has e be
ene profilede by e thee Associatede Press, e CNN, e ande Timee magazine, ean
dehas edoneehundreds eofe radio einterviews. eHee has e authored eand ecoau
thoredeseveral esuccessful etitles, eincludingeFlippingeHouseseFore Dumm
ies, eForeclosureeInvesting eForeDummies, eForeclosureeSelf-
DefenseeForeDummies, eMortgageeMyths:e77eSecretseThat eWill eSaveeYoueT
housandseoneHomeeFinancing, eandeForeclosureeMyths:e77eSecretseto eSa
vingeThousandseoneDistressedeProperties! e(JohneWiley e&eSons);eProtec
t eYourselfeAgainst eReal eEstateeandeMortgageeFraud:ePreserving etheeAm
ericaneDreameofeHomeownership e(Kaplan);e and eREALeW EALTH ebye Inv
estingeineREALeESTATEe(Prentice eHall).
Toe finde oute moree aboute Ralphe Roberts e ande whate hee cane offere youe
andeyoureorganizationeas eaespeakereandecoach, evisiteAboutRalph.com.
eFore details e one howe toe protecte yourself e ande youre homee from e real ee
stateeandemortgageefraud, echeckeouteRalph’s eblogeateFlippinge Frenz
y.com.eAndedon’temissetheelatesteadditionetoeRalph’s efamily eofe Webesit
es eandeblogs, eGetFlipping.com,ewhereeRalpheoffers eaddi-
etional e informatione ande tips e one thee arte ofe flippinge houses e ande inves
t-einge ine foreclosures e ande pre-
foreclosures. e Youe cane contacte Ralphe by eemailinge hime ate RalphRobe
eore callinge586-751-0000.
ChipeCummings,eCMC,eis eaerecognized eexperteine thee areas eof ereal e es
tateelendingeande e-
Marketing, eandeis eae Certified eMortgagee Consultante with emoree thane 2
5eyears einetheemortgageeindustry eand emoree thane aebillionedollars eine
sales evolume.
Chipehas ewrittene hundreds eof earticles eand eappeared enumerous e times
eoneradio, etelevision, eand ein evarious emagazines eincludingeEntrepreneu
r,eMortgageeOriginator,eReal eEstateeBanker/Broker,eandeTheeMortgage
ePress. eHeeis eaneexperienced eprofessional ein eall eareas eof ereal e estate efi
nancing, eincludingeresidential eand ecommercial emortgages, e govern-
ementelending, eregulatory eandecompliance eissues. eHeeis epaste presiden
teofetheeMMBAe(MichiganeMortgage eBrokers e Association), e andeis ea elic
ensedemortgage ebroker eand elender eineMichigan.
As eaneinternational espeaker, eheehas eaddressede groups eand eorganiza
-
etions eofeall etypes, eandetrains e thousands eofemortgageeprofessionals ef
romearoundetheecountry e every eyear. eChipeis e aecertifiede national e trai
nereforecontinuinge educationein emoree thane 40es tates, eand ehas eserv e
deas eaneexpertewi tness ein estateeand efederal ecourts. eHeeis e alsoe the eau
thoreofeABC’seofeFHA eLendingeandeStopeSellingeandeStart eListening! e–
eMarketing eStrategieseThat eCreateeTopeProducerse(Northwind), eMort
gageeMyths:e77eSecretseThat eWill eSaveeYoueThousandseoneHomeeFina
ncing,eForeclosureeMyths:e77eSecretseto eSavingeThousandseoneDistress
edeProperties! eandeCashingeIneonePre-
eforeclosures eand eShort eSalese(JohneWiley e&eSons).
,Dedication
From eRalph: eToereal eestateeinves tors e andeprofessionals ewhoe ar
eededicatede toesupportinge and epromotinge thee Americane dream eo
fehomeownership.
From eChip: eToemy eassistanteDebbieeForthe who ehas emanaged eto ekee
pemeeorganizedefor ethe elaste 14 eyears, eande toemy ewifee Lisaewhoeputs e
upewitheall etheecrazy e hours eande remains emy e #1 efan.
Authors’ Acknowledgments
e
Thanks etoeacquisitions eeditoreLindsay eLefev ere, ewho echose eus e toe aut
horethis ebookeandegui ded eus e throughe thee toughe part eofe gettingestarte
deandetoeoureagent,eNeil eSalkindeofeStudioBe(www.StudioB.com),ewho
eironedeouteall etheepreliminary edetails etoemakeethis ebook epossible. eCh
adeSievers, eoureprojecte edi tor, e deserves e aeloud echeer efor eacting eas e aev
ery epatientecollaboratore and egifted eeditor e—
eshufflingechapters eback eand eforth, eshepherding ethee text ethrough epro
duction, emakingesureeany e technical eissues ewereeproperly e resolved, e a
ndeservingeas etheeunofficial equality econtrol emanager. eMegan eKnoll, eou
recopy eeditor, eearns ean eeditoreof ethe eyear eaward efor eferreting eout eour et
ypos, emisspellings, egrammatical eerrors, eandeotherelanguage efaux epas-
es,eineadditionetoeassistingeChad eas e readere advocate e—
easkingetheequestions eweeshould ehavee asked eour-
eselves. eAnd, eweetipeourehats eto ethee productionecrew efor edoingesuch ea
neoutstandingejobeofe transforminge aelooseecollectioneofe texte andeillust
ra-etions eintoesuchean eattractiveebound ebook.
Weealsoewishetoeexpress eoure appreciatione toe theeNational eAssociatio
neofeMortgage eBrokers, eNational eAssociation eof eRealtors ®, ethe eMortga
geeBankers eAssociationeofeAmerica, eande theeMichigan eMortgageeBrok
ers eAssociationeforetheiresupporte ande assistance.
Weeoweespecial ethanks e toeoure technical e editor, ePatrickeLecomte, efor e
flaggingetechnical eerrors ein ethe emanuscript, ehelping eguide eits econ-
etent, eandeofferinge his eown etips, e tricks, eandei nsights e from ethee world e
ofereal eestateefinancing.
, Introduction
R eal eestateeinvestingeis e ane expensiveehabit. e You eneed emoney e toefin
anceetheepurchas e, erenovate eyour efixer-upper, eandecov er
theeholdingecosts ewhileeyoueprepare eto esell eore rent ethe eproperty. eT
heegoodenews eis ethateit edoesn’t eall ehavee toe be eyouremoney. eInefact,e t
heeless eofeyoureownemoney eyou ecan euse eand etheemore eyouecan ebor
row,etheebiggere thee returneoneyoureinv estment. e Add ethe epoten-
etial ecrediteandemarketewoes elikee theefirs tedecade eofe the e2000s, e an
deinvestingeinereal eestatee alsoebecomes ea ebit emoreeof eane adventure
.
Liningeupefinancial eresources ewell eineadvanceeof escouringe theeneigh-
eborhoodeforeinvestmenteopportunities e enables eyou eto epounce eon eae
bargaineandegives eyou eleverage eine negotiatingethe epriceeyou eulti-
emately epay eforeaeproperty. eWheneyou eplacee ane offereon ea ehousee and
eothere bids e comee in, e thee sellere may e accepte youre offere ofe thousand
s eofedollars eless esimply ebecauseeyouehavee the efinancingeine place eto eq
uickly ecloseetheedeal.eReady ecashe alsoefrees eyou eto eplane and ebegin ere
habbingetheeproperty eimmediately einsteadeof ewai ting earoundeforesl
uggisheloaneapprovals eandecredi techecks.
Ifeyou’reethinkingethat eyouecan’t epossibly egeteyouremi tts eone enough
ecashetoefinanceeyoureventure, eFinancing eReal eEstateeInvestments eFo
reDummieseis etheebookeforeyou. eHereeyou ediscover ethee best esources
e foreinvestmentecapital e and ehow eto ego eaboute tappingeintoe thes eeso
urces etoefuel eyourenext eventure.
About This Book
e e
This ebookeisn’teaeget-rich-
quickeguideetoeinvestingein ereal e estate e ore ae guideeorea etutorial eo
nehowetoebuy eproperty ewitheno emoney edown e(althoughe we edoeco
verethatetopic). eFinancing eReal eEstateeInvestmentseForeDummiesed
elivers ewhatetheetitle epromises e—
eaetreasureemape thates hows eyou ewheree toefindesources eof ereal e est
ateeinvestmentecapital eand egui danceeone howe toe digei teup.
RalpheandeChipeareebotheseasonedeinvestors. eWe’vee eachebuiltewealt
hethrougheinvestingeinereal eestatee—ebuyingeandesellingefixer-
uppers eandebuyingeande rentinge out ebothe residential eand ecommercial
eproperty. eAlthough ewe ehavee used eoureownemoney eoneoccasioneto efi
nanceeourepurchas es e and e renovations, e we’vee primarily e succeeded
e withe theeuseeofeothere people’s emoney e(OPM). eO ure grandmothers ew
ereeourefirstefinancial e backers, ebute we’ve eexpanded eour eoptions esinc
Publishedeby
Wiley e Publishing,e Inc.
111eRiver eSt.
Hoboken,eNJe07030-5774
www.wiley.com
Copyrighte© e20 09 eby eWi ley ePu blis hin g, eIn c.,eIn dianapo lis, eIn dia
nae Publishede by e Wiley ePub lishin g, e Inc., eI ndian apo lis, e Indi an ae
Publishedesimult an eous ly ei ne Can ad a
Noe parte of e thise publicatione may e bee reproduced, e storede ine ae retrievale system e or e transmitt ede ine any e for
m e or e by e any e means,e electronic, e mech anical, e photocopying, e recordin g, e sc annin ge or e other wise, e exc ept e as
e permit-
e tede under e Sections e 107e or e 108e of e thee 19 76e Unitede Stat ese Copyrigh te Act,e without e eith er e the e prior e writte
ne per-e missione of e thee Publisher, e or e authorizatione throughe p aymente of e t hee appropriatee per-
copy e feee toe thee CopyrighteClear anc eeC ent er,e222eRos ewoodeDrive,eD anvers, eMA e0 1923,e (978 )e75 0-
8400,efaxe(978)e646-
8600.e Requestse toe thee Publisher e for e permissione shoulde b ee ad dress ede toe th ee Permissionse Departm ent,e J
ohne Wiley e &eSons,eInc.,e111eRiver eStreet,eHoboken,e NJe0703 0,e(201) e748-6 011,ef axe (201 )e7 48-
6008,eor eonlineeate http://www.wiley.com/go/permissions.
Trademarks: e Wi ley,et he e Wiley e Pu blis hin ge lo go, eFor e Du mmies, et he eD ummi ese Man elo go,eA eR efer enc eefor e
thee Resteof eUs!,e Th ee Dummi es e Way, eD ummiese Dai ly,e Th e eFu ne an de Easy e Way,e Du mmies. com, eMaki ng e Ev
erythinge Easier,e ander elat ed etr ad ee dr ess ear e etr ad em arks eor er egist er ed etr ad em ark s eof eJoh ne Wiley e& eSon
s,eInc.eand/or e its eaffi liat es ein eth ee Unit edeSt at es eand eot her eco un tries, e an dem ay e not eb ee us ed ewit hou te writt
enepermission. eAlle ot her etr ad em ark s e ar eet h eepr op erty eof e th eir er esp ec tive eow n ers. e Wi ley e Pub lishi ng, eIn c.
,eisenoteassociat ede with e any e prod uct eor ev endor em entio n ed einet hise book.
LIMIT e OFe LIABILIT Y/ DISCLAIM ER e OFe WARR ANT Y: e THEe PUBLISH ERe ANDe THEe A UTHORe MAKEe NOe
REP-
e RESENT ATIONS e ORe WA RR ANTIES e WITH e RESP ECT e T Oe TH Ee ACCURA CYe ORe COMP LETENESS e OFe
THEe CONTENTS e OFe TH IS e W OR Ke A NDe SPECIF ICAL L Ye DISCLA IM e AL Le WA RR ANTIES,e INCLU DING e
WITH OUT e LIM ITA TIONe WAR RA NT IES e OFe FITNESS e F ORe Ae PART ICU LAReP URP OS E.e NOe WAR RA NT
Ye MA Ye BEe CR E-
e ATEDe ORe EXTENDEDe BYe SA LES e ORe PR OM OT IONA Le MAT ER IA LS.e THEe A DV ICEe A NDe ST RAT EG IES e
CON-
e TAINEDe HEREINe M A Ye NOT e B Ee SU ITA BL Ee F ORe EVER Ye SIT UA TION.e THIS e W ORKe IS e SOLDe WITH e T
HEe UNDERS TA NDING e THA T e THEe PUB LISH ERe IS e NOT e ENG AG EDe INe R ENDER ING e LEGAL ,e ACCOU NT
ING ,e ORe OTH ERe PR OF ESSIONA Le SER VICES .e IFe PR OF ESSIONA Le ASSIST ANCEe IS e REQUIRED,e TH Ee SE
RVICES e OFe Ae COMP ET ENT e PR OF ESSIONA Le PERS ONe SH OU L De BEe S OU GHT.e NEITH ERe TH Ee PU BL IS
HERe NORe TH Ee AUTH OReSHA LLe BEe LIABL Ee F ORe DA MA GES e AR ISING eH EREFR OM. eTH EeF ACT eTHA T
eANe ORGA NIZA TIONe ORe WEBSITEe IS e REFERR EDeT Oe IN eTHIS e W OR KeAS eAe CITAT IONe AND/ OR eAeP
OT ENTIA LeS OUR CEe OFeF UR -
e THERe INF OR MAT IONe DOES e NOT e MEA Ne THAT e TH Ee A UTH ORe ORe TH Ee PU BL ISHERe ENDORS ES e T
HEe INFORM ATIONe THEe OR GA NIZA TIONe ORe WEBSIT Ee MA Ye P ROVIDEe ORe RECOMM ENDAT IONS e I
Te eMA
For Ye MAKE.
general einforme Fatio
UR THER, e R EA
neo ne our DERS
e oth e SH
er epro ducOUL
tse De BeEseervices,
and AW AR E THAT
epe leas INTact
eece ont EReNET Wstom
o ur eeCu EBS IT
er ES e LIST
e C ar EDartm
eeD ep e INeen
teTHIS e Wethe
within OReK e MA
U.S. eateYe HAVEe CH
877-762- 297A4,NG EDe OR
eoutsid DISAPP
eetehee U.S.eatEA RED572-
e 317- e B ETW EEN
399 3, WHe3EN
eoreefax e TH
17-5 72-IS e4002.
WORKe WAS e W RIT T
ENe ANDe WHENe IT e IS e REA D.
For etechnical esu ppo rt, ep lease evisit ewww.wiley.com/techsupport.
Wiley ealso ep ub lish esei tse books eine a evari ety e of e electro nicefor mats. eSom e eco nt en tet h ate ap p earsein epri nte
may e notebeeavai lab le eine electr onic ebook s.
Library eof eCongresseControleNumber:e200992 1030e IS
BN:e978-0-470-42233-5
Manufacturedein eth e eUnit edeSt at es eof eAm erica
10e 9e 8e 7e 6e 5e 4e 3e 2e 1
,About the Authors
e e
RalpheR.eRoberts,eCRS,eGRI,eis eaeseasonedeprofessional eineall eareas e
ofereal eestate,eincluding ebuyinge andeselling ehomes,einvestingein ereal e e
state,eandebuildinge and emanagingereal e estatee agenteteams. eHee has e be
ene profilede by e thee Associatede Press, e CNN, e ande Timee magazine, ean
dehas edoneehundreds eofe radio einterviews. eHee has e authored eand ecoau
thoredeseveral esuccessful etitles, eincludingeFlippingeHouseseFore Dumm
ies, eForeclosureeInvesting eForeDummies, eForeclosureeSelf-
DefenseeForeDummies, eMortgageeMyths:e77eSecretseThat eWill eSaveeYoueT
housandseoneHomeeFinancing, eandeForeclosureeMyths:e77eSecretseto eSa
vingeThousandseoneDistressedeProperties! e(JohneWiley e&eSons);eProtec
t eYourselfeAgainst eReal eEstateeandeMortgageeFraud:ePreserving etheeAm
ericaneDreameofeHomeownership e(Kaplan);e and eREALeW EALTH ebye Inv
estingeineREALeESTATEe(Prentice eHall).
Toe finde oute moree aboute Ralphe Roberts e ande whate hee cane offere youe
andeyoureorganizationeas eaespeakereandecoach, evisiteAboutRalph.com.
eFore details e one howe toe protecte yourself e ande youre homee from e real ee
stateeandemortgageefraud, echeckeouteRalph’s eblogeateFlippinge Frenz
y.com.eAndedon’temissetheelatesteadditionetoeRalph’s efamily eofe Webesit
es eandeblogs, eGetFlipping.com,ewhereeRalpheoffers eaddi-
etional e informatione ande tips e one thee arte ofe flippinge houses e ande inves
t-einge ine foreclosures e ande pre-
foreclosures. e Youe cane contacte Ralphe by eemailinge hime ate RalphRobe
eore callinge586-751-0000.
ChipeCummings,eCMC,eis eaerecognized eexperteine thee areas eof ereal e es
tateelendingeande e-
Marketing, eandeis eae Certified eMortgagee Consultante with emoree thane 2
5eyears einetheemortgageeindustry eand emoree thane aebillionedollars eine
sales evolume.
Chipehas ewrittene hundreds eof earticles eand eappeared enumerous e times
eoneradio, etelevision, eand ein evarious emagazines eincludingeEntrepreneu
r,eMortgageeOriginator,eReal eEstateeBanker/Broker,eandeTheeMortgage
ePress. eHeeis eaneexperienced eprofessional ein eall eareas eof ereal e estate efi
nancing, eincludingeresidential eand ecommercial emortgages, e govern-
ementelending, eregulatory eandecompliance eissues. eHeeis epaste presiden
teofetheeMMBAe(MichiganeMortgage eBrokers e Association), e andeis ea elic
ensedemortgage ebroker eand elender eineMichigan.
As eaneinternational espeaker, eheehas eaddressede groups eand eorganiza
-
etions eofeall etypes, eandetrains e thousands eofemortgageeprofessionals ef
romearoundetheecountry e every eyear. eChipeis e aecertifiede national e trai
nereforecontinuinge educationein emoree thane 40es tates, eand ehas eserv e
deas eaneexpertewi tness ein estateeand efederal ecourts. eHeeis e alsoe the eau
thoreofeABC’seofeFHA eLendingeandeStopeSellingeandeStart eListening! e–
eMarketing eStrategieseThat eCreateeTopeProducerse(Northwind), eMort
gageeMyths:e77eSecretseThat eWill eSaveeYoueThousandseoneHomeeFina
ncing,eForeclosureeMyths:e77eSecretseto eSavingeThousandseoneDistress
edeProperties! eandeCashingeIneonePre-
eforeclosures eand eShort eSalese(JohneWiley e&eSons).
,Dedication
From eRalph: eToereal eestateeinves tors e andeprofessionals ewhoe ar
eededicatede toesupportinge and epromotinge thee Americane dream eo
fehomeownership.
From eChip: eToemy eassistanteDebbieeForthe who ehas emanaged eto ekee
pemeeorganizedefor ethe elaste 14 eyears, eande toemy ewifee Lisaewhoeputs e
upewitheall etheecrazy e hours eande remains emy e #1 efan.
Authors’ Acknowledgments
e
Thanks etoeacquisitions eeditoreLindsay eLefev ere, ewho echose eus e toe aut
horethis ebookeandegui ded eus e throughe thee toughe part eofe gettingestarte
deandetoeoureagent,eNeil eSalkindeofeStudioBe(www.StudioB.com),ewho
eironedeouteall etheepreliminary edetails etoemakeethis ebook epossible. eCh
adeSievers, eoureprojecte edi tor, e deserves e aeloud echeer efor eacting eas e aev
ery epatientecollaboratore and egifted eeditor e—
eshufflingechapters eback eand eforth, eshepherding ethee text ethrough epro
duction, emakingesureeany e technical eissues ewereeproperly e resolved, e a
ndeservingeas etheeunofficial equality econtrol emanager. eMegan eKnoll, eou
recopy eeditor, eearns ean eeditoreof ethe eyear eaward efor eferreting eout eour et
ypos, emisspellings, egrammatical eerrors, eandeotherelanguage efaux epas-
es,eineadditionetoeassistingeChad eas e readere advocate e—
easkingetheequestions eweeshould ehavee asked eour-
eselves. eAnd, eweetipeourehats eto ethee productionecrew efor edoingesuch ea
neoutstandingejobeofe transforminge aelooseecollectioneofe texte andeillust
ra-etions eintoesuchean eattractiveebound ebook.
Weealsoewishetoeexpress eoure appreciatione toe theeNational eAssociatio
neofeMortgage eBrokers, eNational eAssociation eof eRealtors ®, ethe eMortga
geeBankers eAssociationeofeAmerica, eande theeMichigan eMortgageeBrok
ers eAssociationeforetheiresupporte ande assistance.
Weeoweespecial ethanks e toeoure technical e editor, ePatrickeLecomte, efor e
flaggingetechnical eerrors ein ethe emanuscript, ehelping eguide eits econ-
etent, eandeofferinge his eown etips, e tricks, eandei nsights e from ethee world e
ofereal eestateefinancing.
, Introduction
R eal eestateeinvestingeis e ane expensiveehabit. e You eneed emoney e toefin
anceetheepurchas e, erenovate eyour efixer-upper, eandecov er
theeholdingecosts ewhileeyoueprepare eto esell eore rent ethe eproperty. eT
heegoodenews eis ethateit edoesn’t eall ehavee toe be eyouremoney. eInefact,e t
heeless eofeyoureownemoney eyou ecan euse eand etheemore eyouecan ebor
row,etheebiggere thee returneoneyoureinv estment. e Add ethe epoten-
etial ecrediteandemarketewoes elikee theefirs tedecade eofe the e2000s, e an
deinvestingeinereal eestatee alsoebecomes ea ebit emoreeof eane adventure
.
Liningeupefinancial eresources ewell eineadvanceeof escouringe theeneigh-
eborhoodeforeinvestmenteopportunities e enables eyou eto epounce eon eae
bargaineandegives eyou eleverage eine negotiatingethe epriceeyou eulti-
emately epay eforeaeproperty. eWheneyou eplacee ane offereon ea ehousee and
eothere bids e comee in, e thee sellere may e accepte youre offere ofe thousand
s eofedollars eless esimply ebecauseeyouehavee the efinancingeine place eto eq
uickly ecloseetheedeal.eReady ecashe alsoefrees eyou eto eplane and ebegin ere
habbingetheeproperty eimmediately einsteadeof ewai ting earoundeforesl
uggisheloaneapprovals eandecredi techecks.
Ifeyou’reethinkingethat eyouecan’t epossibly egeteyouremi tts eone enough
ecashetoefinanceeyoureventure, eFinancing eReal eEstateeInvestments eFo
reDummieseis etheebookeforeyou. eHereeyou ediscover ethee best esources
e foreinvestmentecapital e and ehow eto ego eaboute tappingeintoe thes eeso
urces etoefuel eyourenext eventure.
About This Book
e e
This ebookeisn’teaeget-rich-
quickeguideetoeinvestingein ereal e estate e ore ae guideeorea etutorial eo
nehowetoebuy eproperty ewitheno emoney edown e(althoughe we edoeco
verethatetopic). eFinancing eReal eEstateeInvestmentseForeDummiesed
elivers ewhatetheetitle epromises e—
eaetreasureemape thates hows eyou ewheree toefindesources eof ereal e est
ateeinvestmentecapital eand egui danceeone howe toe digei teup.
RalpheandeChipeareebotheseasonedeinvestors. eWe’vee eachebuiltewealt
hethrougheinvestingeinereal eestatee—ebuyingeandesellingefixer-
uppers eandebuyingeande rentinge out ebothe residential eand ecommercial
eproperty. eAlthough ewe ehavee used eoureownemoney eoneoccasioneto efi
nanceeourepurchas es e and e renovations, e we’vee primarily e succeeded
e withe theeuseeofeothere people’s emoney e(OPM). eO ure grandmothers ew
ereeourefirstefinancial e backers, ebute we’ve eexpanded eour eoptions esinc
