Real Estate Investing in North Texas

Investing in real estate can be one of the best ways to supplement your income and secure your retirement. The most comforting thing about real estate is that it's a tangible asset that you can actually see and touch. The goal of any investment is to buy low and sell high. Real Estate, however, is a versatile investment that can earn you money several different ways.

The first thing you want to do when investing in real estate is have a strong base to start out from. This means eliminating debt on your credit cards, cleaning up your credit score, and having some cash to start with. Real Estate is a competitive business, so you want to leave a little room for error in the beginning. However, once you find a system that works for you and you implement it in a diciplined way, your return will far outweigh any early mistakes

It is wise to get the help of some real estate professionals along the way. Find a realtor, a mortgage broker or lender, and contractors that you can work with on a regular basis. This way you will have consistency in your service and may even receive some discounts. Keeping costs low and maintaining efficiency will increase your profit margin.

Just like in any other investment, real estate requires that you get educated and know your market thoroughly. Residential homes in North Texas are cheaper than most areas of the country. The median price of a home in the Dallas-Plano area is $155,500 with a 5.9% projected growth rate in 2006, and a 6.3% projected growth rate in 2007. It seems that new communities are popping up everywhere and most of the expansion is to the north of Dallas. A good example of a community that fits into this category is Craig Ranch in McKinney, Texas.

The ultimate goal of real estate investing is to make money, so take advantage of every opportunity. Form a plan, get educated, and find some real estate professionals to help you get started. If you are patient and set realistic goals, you will find out why real estate investing is one of the best ways to make money.

One of the most efficient ways to invest in residential real estate is to do a lease/purchase. The reason a lease/purchase is so effective, is because it provides a win-win situation for both the seller/landlord and the buyer/tenant. For the owner, it provides a potential buyer and a tenant that will be willing to take care of the home. For the buyer, it provides the right to purchase the home for a fixed price and time to save money and improve their credit. Here's how it works.

The owner and the buyer enter into a contract whereby the potential buyer agrees to lease the home for a set amount of time. At the end of the lease, the buyer then has the option of buying the home for the price agreed upon in the contract. In order to secure that price, the buyer pays an option fee up front. If the buyer chooses to buy the home at the end of the lease, he can apply the option fee and any other money saved toward the down payment. If the they choose to not purchase the home, the owner keeps the option fee.

For the owner, the lease/purchase offers several different ways to make money from the home:

      - the goal is to buy the home for 10-20% below market value
      - the monthly rent you collect will exceed your mortgage payment
      - you can right off mortgage interest and other expenses on your taxes
      - you pay down the principle on your mortgage and build equity in the house
      - the price of the home will appreciate
      - if the potential buyer decides not to buy, you keep the option fee

This is just a basic outline of how a lease/purchase works and the opportunities it presents. It is still a real estate investment strategy that is unknown by many and discussed by too few. For more detailed information, a recommended read is "Buy Low, Rent Smart, Sell High" by Scott Frank and Andy Heller.

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