Property Tycoons: Use Other People's Money to Fund Your Investments
By Parmdeep Vadesha
Recent research has trumpeted the anticipated rise in the number of property tycoons. Market analyst Mintel revealed
that the number of individuals who make significant amounts of money in the property business are expected to double by
the end of the decade. The estimated growth is being attributed to the prediction that one million homeowners
will be renting out a second property by the year 2010. What does this indicate? That you can take advantage of a
growing market and eventually achieve the financial goals you set for yourself.
More and more property owners are in position to become property tycoons after reaping the benefits that bricks and
mortar property investing offers and its importance as a compliment to saving for retirement. But if you want a
strategy that has helped many others to succeed and become tycoons in property themselves, it's using other people's
money (OPM) to finance a property investment portfolio. If you haven't yet learned about the technique, here are some
things you will want to look into.
Many property financing services offer no money down schemes. There's bridging loans which let you buy
properties using other people's money as a deposit. While a bridging loan has a preset repayment date, you can choose
to follow an open schedule. This is one way of growing your property portfolio without having to rely on your savings.
How to buy using other people's money:
One of the easiest methods of obtaining properties without having to spend a fortune is by finding properties that
have been sitting on the market for a considerably long time. Many of these homeowners are motivated sellers who
look to selling their houses fast that they'd be willing to give a hefty discount to the buyer - oftentimes below
market value.
To ensure that the property is indeed below its true market value, get a surveyor in. He has the experience to declare
if the property you want to acquire is indeed a BMV property and will make a note of this on the surveyor's
valuation report. This assessment will be especially beneficial when you want to buy a property without having
to spend your own money.
Another effective way of sourcing BMV properties is through property auctions. Due to the evening out of property
prices, it is now possible to make big profits at auctions. If you plan to take part in an auction, you may want to
heed what some experts at buying at auctions recommend: Target no less than 5 properties in each auction and
prepare yourself to purchase any one of them on the day of sale.
The basics:
Of course, if you're buying at auction you will need to do crucial research on the properties you're eyeing. Carefully
go through all the documents associated with those properties. Choose the property that best answers your
needs with regard to your investment goals. Set your maximum bid price and always remember to adhere to it as
this will help you avoid making the mistake of over-bidding. Prior to attending an auction, get your
finances in good shape since you'll need to make a 10% deposit once the gavel falls on your bid.
Using other people's money is one of the most attractive aspects of property investment. Once you have learned the
finer points in using other people's money to finance your property investments, the possibility of you becoming the
next property tycoon won't be too distant.
Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs
on the web who buy below market value properties from distressed homeowners facing repossession, divorce and
bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide at http://www.Property-System.com.
